a. Prepare the journal entry to record the early retirement of the bonds.
b. What would the entry be if Hurette were able to redeem the bonds on the open market at a cost of $9,500,000?
c. What is the economic significance of a gain or loss on the redemption of bonds? How do you think the gain or loss should be reported in the financial statements? Explain.
In responding, consider the information needs of users of the financial statements.