On July 1, 2015, Advocate Company exercises an $8,000 call option (plus par value) on its outstanding bonds that have a carrying value of $416,000 and par value of $400,000 The company exercises the call option after the semiannual interest is paid on June 30, 2015 Record the entry to retire the bo...

2015 July 1 Bonds Payable 400000 Pr ...

On July 1, 2015, Advocate Company exercises an $8,000 call option (plus par value) on its outstanding

Question:

On July 1, 2015, Advocate Company exercises an $8,000 call option (plus on its outstanding bonds that have a carrying value of $416,000 and of $400,000. The company exercises the call option after the semiannual interest is paid on June 30, 2015. Record the entry to retire the bonds.
Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...