Wishful Thinking (WT) School of Management is building a new facility on a piece of donated land. It received a generous cash donation from a local business to support the project, and now needs to borrow additional $10,000,000 to complete the project. Therefore WT School of Mgmt issued $10,000,000 of 6.00% 10-year bonds. These bonds were issued on January 1, 2016, and pay interest annually on each January 1. The bonds yield is 7.00% when issued. WT School of Mgmt incurred $600,000 in bond issuance costs related to the bond sale.
1. Assume that on July 1, 2019, WT School of Management retires 75% of the bonds at a cost of $6,500,000 plus accrued interest. Prepare journal entries to record this retirement.
I dont know how to calculate interest expense and discount on bonds payable.