On July 1, 2014, Loudre Ltd exercises a $4,000 call option on its outstanding bonds, which have a carrying value of $206,000 and par value of $200,000 Loudre exercises the call option immediately after the semi annual interest is paid on June 30, 2014 Record the journal entry to show the retirement...

2014 July 1 Bonds Payable 200000 ...

On July 1, 2014, Loudre Ltd. exercises a $4,000 call option on its outstanding bonds, which have

Question:

On July 1, 2014, Loudre Ltd. exercises a $4,000 call option on its outstanding bonds, which have a carrying value of $206,000 and of $200,000. Loudre exercises the call option immediately after the semi-annual interest is paid on June 30, 2014. Record the journal entry to show the retirement of 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,...