Required information Exercise 9-16B Record the early retirement of bonds issued at a discount (LO9-6) The following information applies to the questions displayed below] On January 1, Year 1, a company issues $360,000 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 $335,537 Exercise 9-16B Part 1 Required: 1. Using an amortization schedule, show that the bonds have a carrying value of $339,026 on December 31, Year 2. (Round Interest expense to nearest whole dollar.) Increase in Carrying Value Interest Date Cash Paid Carrying Value Expense 01/01/Year 1 06/30/Year 1 12/31/Year 1 06/30/Year 2 12/31/Year 2 Exercise 9-168 Part 2 2. If the market interest rate drops to 5% on December 31, Year 2, it will cost $406,998 to retire the bonds. Record the retirement of the bonds on December 31, Year 2. (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.) View transaction list Journal entry worksheet 1 Record the retirement of the bonds. Note: Enter debits before credits. Date General Journal Debit Credit December 31 Record entry Clear View peneral journal