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Knowledge Check 01 On January 1, Year 1, Zeta Corporation issues $100,000 of 8% bonds maturing in 10 years, when the market rate of interest is 9%. Market interest rates drop to 7% by December 31, Year 1 . The company retires the bonds on December 31 , Year 1 by paying $106,595. The carrying value of the bonds as of this date is $93,920. The journal entry for retirement of the bonds will include a: Multiple Choice credit to Discount on Bonds Payable for $6,595 credit to Discount on Bonds Payable for $6,080 debit to Premium on Bonds Payable for $6,080 debit to Premium on Bonds Payable for $6,595