Question - Record the settlement of debt.
A company has $500,000 of 6% semiannual, 6 year term bonds outstanding. The bonds sold originally for $506,000 on January 1, 2015. Interest payment dates are January 1 and July 1. It is now September 1, 2018. The company has been handling the premium using straight line amortization. The company calls the bonds at their call price of 1.03.
Remember, accrued interest must be paid and the premium must be amortized.