The long-term liability disclosure note to the Year 2 annual report of Penguin Pilots Inc. included...

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The long-term liability disclosure note to the Year 2 annual report of Penguin Pilots Inc. included the following. December 31 ($ millions) 6% Convertible senior debentures due Year 9 Additional assumptions: 1. Debentures were issued at par on January 1 in Year 2 and pay interest each December 31. 2. Debentures retired were scheduled to mature December 31, Year 9. 3. Assume instead that Alaska Air decides to retire the bonds at December 31 of Year 2, paying the fair value of the bonds, which reflected a yield rate of 5%. Required a. Prepare the December 31, Year 2, interest payment entry. • Note: Round your answers to the nearest million dollars. Date Dec. 31, Year 2 Interest Expense Bonds Payable To record interest payment Year 2 Year 1 $185 $0 Account Name Date Dec. 31, Year 2 Bonds Payable b. Prepare the December 31, Year 2, bond retirement entry. • Note: Round your answers to the nearest million dollars. Account Name Loss on Bond Retirement Cash To record bond retirement Dr. (millions) Cr. ($ millions) Dr. ($ millions) Cr. ($ millions) The long-term liability disclosure note to the Year 2 annual report of Penguin Pilots Inc. included the following. December 31 ($ millions) 6% Convertible senior debentures due Year 9 Additional assumptions: 1. Debentures were issued at par on January 1 in Year 2 and pay interest each December 31. 2. Debentures retired were scheduled to mature December 31, Year 9. 3. Assume instead that Alaska Air decides to retire the bonds at December 31 of Year 2, paying the fair value of the bonds, which reflected a yield rate of 5%. Required a. Prepare the December 31, Year 2, interest payment entry. • Note: Round your answers to the nearest million dollars. Date Dec. 31, Year 2 Interest Expense Bonds Payable To record interest payment Year 2 Year 1 $185 $0 Account Name Date Dec. 31, Year 2 Bonds Payable b. Prepare the December 31, Year 2, bond retirement entry. • Note: Round your answers to the nearest million dollars. Account Name Loss on Bond Retirement Cash To record bond retirement Dr. (millions) Cr. ($ millions) Dr. ($ millions) Cr. ($ millions)