Ernst Corp. issued \(\$ 1,000,000\) of 8-percent bonds payable at 97 on October 1, 19X0. These bonds mature on October 1, 19X8, and are callable at 101. Ernst pays interest each April 1 and October 1. On October 1, 19X5, when the bonds' market price is 104, Ernst retires the bonds in the most economical way available.

\section*{Required}

Record the payment of the interest and amortization of bond discount at October 1, 19X5, and the retirement of the bonds on that date. Ernst uses the straight-line amortization method.