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    Bond Retirements before Maturity

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    The company had $450,000 in callable bonds in the open market. The company's bonds were selling in the open market at 108 and were callable at 109. The company decided to retire the bonds early. Make the necessary journal entry(ies) to record the retirement of these bonds.

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    The company may pay off or redeem and retire its bonds before maturity by exercising call option. The company uses the money obtained by issuing new bonds at a lower interest rate to ...

    Solution Summary

    This Solution contains the necessary journal entry and a brief explanation.