On January 1, 2024, White Water issues $460,000 of 8% bonds, due in 15 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 $502,302.

Required: 1. Using an amortization schedule, show that the bonds have a carrying value of $496,935 on December 31, 2026

Required:2. If the market interest rate increases to 9% on December 31, 2026, it will cost $426,660 to retire the bonds. Record the retirement of the bonds on December 31, 2026