Exercise $10-10($Algo$)$ Bond retirement by call option LO P$4$

Tyrell Company issued callable bonds with a par value of $$26,000.$ The call option requires Tyrell to pay a call premium of $$500$ plus

par $($or a total of $$26,500)$ to bondholders to retire the bonds. On July $1,$ Tyrell exercises the call option. The call option is exercised

after the semiannual interest is paid the day before on June $30.$ Record the entry to retire the bonds under each separate situation.

The bonds have a carrying value of $$21,000.$

The bonds have a carrying value of $$27,000.$

Journal entry worksheet

Record the retirement of the bonds assuming the bonds have a carrying value

of $$21,000.$

Note: Enter debits before credits.