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On January 1, Toby Manufacturing issued $3,000,000 par value 12%, 5-year bonds (i.e., there were 3,000 of $1,000 par value bonds in the issue). Interest

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On January 1, Toby Manufacturing issued $3,000,000 par value 12%, 5-year bonds (i.e., there were 3,000 of $1,000 par value bonds in the issue). Interest is payable semiannually each January 1 and July 1 with the first interest payment due at the end of the period on July 1. The market rate of interest was 14% on the date that Toby issued the bonds. Toby retired the bonds at $2,700,000 with an open market purchase at the end of the first year. Prepare the journal entry to record the derecognition of the obligation. Toby uses the effective interest rate method. (Use the present value and future value tables, the formula method, a financial calculator, or a spreadsheet for your calculations. If using present and future value tables or the formula method, use factor amounts rounded to five decimal places, X.XXXXX. Round all intermediary and final answers to the nearest whole dollar. Record debits first, then credits. Exclude explanations from any journal entries.) Retirement Date Account December 31

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