Answer:
Dr Bonds Payable	$400,000	
Dr Loss on retirement of bonds	$12,000
Cr Cash $396,000
Cr Discount on bonds	$16,000	
Explanation:
Preparation of the journal entry to record the redemption of the bonds.
Dr Bonds Payable	$400,000	
Dr Loss on retirement of bonds	$12,000
($400,000-$388,000)	
Cr Cash $396,000
($400,000 *99% = $396,000) 
Cr Discount on bonds	$16,000	
($400,000+$12,000-$396,000)
(To record the redemption of the bonds)