Retirement of Debt before Maturity The Long-Term Debt section of Rodman Companys balance sheet as of December 31, 20Y1, included 8% bonds payable of $300,000
Retirement of Debt before Maturity
The Long-Term Debt section of Rodman Companys balance sheet as of December 31, 20Y1, included 8% bonds payable of $300,000 less unamortized discount of $22,000. Further examination revealed that these bonds were issued to yield 11%. The amortization of the bond discount was recorded using the effective-interest method. Interest was paid on January 1 and July 1 of each year. On July 1, 20Y2, Rodman retired the bonds at 104 before maturity.
Prepare the journal entries to record the July 1, 20Y2, (a) payment of interest, including (b) the amortization of the discount since December 31, 20Y1, and (c) the early retirement on the books of Rodman Company. For a compound entry, if an amount box does not require an entry, leave it blank.
| Interest Expense | | | |
| Cash | | | |
| | | | |
| Interest Expense | | 3290 | |
| Discount on Bonds Payable | | | |
| | | | |
| Loss on Early Retirement of Bonds | | | |
| Bonds Payable | | | |
| Discount on Bonds Payable | | | ? |
| Cash | | | ? |
