Hayden Co. has outstanding $30 million face amount of 9% bonds that were issued on January 1, 2010, for $30,680,000. The 20-year bonds mature on December 31, 2029, and are callable at 104 (that is, they can be paid off at any time by paying the bondholders 104% of the face amount).
Assume that the bonds are called on December 31, 2016. Record the journal entry to show the effect of the retirement of the bonds. (Hint: Calculate the amount paid to bondholders; determine how much of the bond premium would have been amortized prior to calling the bonds; and then calculate the gain or loss on retirement