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Exercise 9-16A Record the early retirement of bonds issued at a discount (LO9-6)

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On January 1, 2021, Splash City issues $420,000 of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. The market interest rate on the issue date is 8% and the bonds issued at $391,460.

Exercise 9-16A Part 2

2. If the market interest rate drops to 7% on December 31, 2022, it will cost $420,000 to retire the bonds. Record the retirement of the bonds on December 31, 2022. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Round your intermediate calculations to the nearest whole dollar amount.)

Record the retirement of the bonds.