The name Hilton is well known in the hotel industry. The Hilton annual report contained the following information concerning long-term debt:

Required:
Explain why there is a difference between the carrying value and the current market value of the longterm debt for Hilton. Assume that Hilton decided to retire all of its long-term debt for cash (a very unlikely event). Prepare the journal entry to record the transaction.

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Long-Term Debt The estimated current market value of long-term debt is based on the quoted market price for the same or similar issues. The current carrying value for long-term debt is $1,132.5 (million) and the current market value is $1,173.5 (million).