Hayden Co. has outstanding $60 million face amount of 8% bonds that were issued on January 1, 2010, for $60,670,000. The 20-year bonds mature on December 31, 2029, and are callable at 102 that is, they can be paid off at any time by paying the bondholders 102% 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.
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. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.