Texas Eastern Transmission Corporation is a unit of PanEnergy Corporation. In a press release, the company announced the retirement of some of its bonds. Excerpts from the press release follow:

.... $100 million face value of outstanding of 10 1/8% debentures and $150 million outstanding of the 10% debentures are outstanding. The 10 1/8% debentures are due Sept. 1, 2015, and the 10% debentures are due Oct. 1, 2015. The redemption price for the 10 1/8% debentures is 105.062% of the principal amount to be redeemed, together with interest accrued to the Oct. 1 redemption date.

To Do:

Please consider how they would account for the retirement of the 10 1/8 bonds. Ask them to assume they were issued at face value.

Points to Note:

Because the maturity date is Sept. 1, it's likely that that's also an interest date, so interest was last paid one month before redemption.