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Because interest rates have fallen, a company retires bonds which had been issued at their face value of $320,000. The company bought the bonds back
Because interest rates have fallen, a company retires bonds which had been issued at their face value of $320,000. The company bought the bonds back at 96.50. The journal entry to record this retirement includes a debit of O $320,000 to Bonds Payable, a credit of $11 200 to Interest Expense, and a credit of $308,800 to Cash. O $308,800 to Bonds Payable and a credit of $308,800 to Cash. $308,800 to Bonds Payable, a debit to Gain on Bond Retirement of $11,200 and a credit of $320,000 to Cash $320,000 to Bonds Payable, a credit of $11,200 to Gain on Bond Retirement, and a credit of $308,800 to Cash
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