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What is the entry on december to record the retirement

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On january 1,20x1 an entity issues bonds with face amount of 4,000,000.00 for 3,784,798.00. The bonds mature on December 31,20x4 and pay annual interest of 16%. The effective interest rate is 18%.

On december 31,20x2 after paying the annual interest the entity retires the bonds at a call premium of 200,000.00. The entity is subject to income tax rate of 30%.

Problem A. What is the entry on December 31 20x2 to record the retirement of the bonds?

Reference no: EM132678127

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