On January 1, 2021, Splash City issues $370,000 of 6% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. The market interest rate on the issue date is 7% and the bonds issued at $330,493.

Required: 1. Using an amortization schedule, show that the bonds have a carrying value of $332,463 on December 31, 2022. (Round Interest expense to nearest whole dollar.)

Date	Cash Paid	Interest Expense	Increase in Carrying Value	Carrying Value
01/01/2021
06/30/2021
12/31/2021
06/30/2022
12/31/2022

If the market interest rate drops to 6% on December 31, 2022, it will cost $370,000 to retire the bonds. Record the retirement of the bonds on December 31, 2022.

Record the retirement of the bonds.