On January 1, 2024, Splash City issues $370,000 of 6% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year. The market interest rate on the issue date is 7% and the bonds issued at $330,493.

2. If the market interest rate drops to 6% on December 31, 2025, it will cost $370,000 to retire the bonds. Record the retirement of the bonds on December 31, 2025.

 

Answer rating: 100% (QA)

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