TreeTop Company Had Issued $5,000,000 of 10-Year Bonds with a 6

Essay

TreeTop Company had issued $5,000,000 of 10-year bonds with a 6% coupon rate and interest to be paid annually.They were issued on January 1,2013 at 96 and have been amortized using the effective interest method through December 31,2019 at which time the balance in the bond discount was $130,000.The effective interest rate was 7%.On June 30,2020,TreeTop retired all the bonds by exercising the call feature.The call price was 101.
Prepare the journal entry for the call of the bonds on June 30,2020.(Remember to amortize the discount and update the book value of the bonds for the half-year prior to retirement).