Math  /  Numbers & Operations

QuestionOn July 1, Aloha Company exercises a call option that requires Aloha to pay $408,000\$ 408,000 for its outstanding bonds that have a carrying value of $416,000\$ 416,000 and a par value of $400,000\$ 400,000. The company exercises the call option after the semiannual interest is paid the day before on June 30.
Record the entry to retire the bonds.

Studdy Solution
Here's the **final journal entry**:
Debit **Bonds Payable** $400,000\$400,000 Debit **Premium on Bonds Payable** $16,000\$16,000 Credit **Gain on Retirement of Bonds** $8,000\$8,000 Credit **Cash** $408,000\$408,000

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