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On July 1, Aloha Co. exercises a call option that requires Aloha to pay $265,200 for...

On July 1, Aloha Co. exercises a call option that requires Aloha to pay $265,200 for its outstanding bonds that have a carrying value of $268,200 and par value of $260,000. The company exercises the call option after the semiannual interest is paid the day before on June 30.
  
Record the entry to retire the bonds.

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Credit Debit $260,000 $8,200 Date Account Titles and Explanation July 1 Bond payable Premium on bonds payable Gain on redempt

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