On July 1, 2014, Loudre Ltd. exercises a $4,000 call

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 of the bonds.

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