The balance sheet for Reading Company reports the following information on

July 1, 2010.

READING COMPANY
Balance Sheet (partial)

Long-term liabilities

Bonds payable

$2,000,000

Less: Discount on bonds payable

30,000

$1,970,000

Reading decides to redeem these bonds at 102 after paying annual interest. Prepare the journal entry to record the redemption on July 1, 2010.

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