Company with year end: Dec 31 Issued $10,000,000 bonds on Dec 1, 2010 for bond proceeds $8,461,427. Yield rate 5%, Prime rate 2%. Bonds dated for...

Company with year end: Dec 31

Issued $10,000,000 bonds on Dec 1, 2010 for bond proceeds $8,461,427. Yield rate 5%, Prime rate 2%.

Bonds dated for release on Oct 1, 2010.

10 years bonds with coupon interest rate at 3%.

Interest payable every Apr 1 and Oct 1.

On Oct 1, 2018, the company retired 1/2 of the bond issued, market rate was 7%

how to do the redemption entry?

The remaining bond has the prime rate risen to 3%, how to record the fair value of bond retirement?