(Entry for Retirement of Bond; Bond Issue Costs) On January 2, 2005, Prebish Corporation issued $1,500,000 of 10% bonds at 97 due December 31, 2014. Legal and other costs of $24,000 were incurred in connection with the issue. Interest on the bonds is payable annually each December 31. The $24,000 issue costs are being deferred and amortized on a straight-line basis over the 10-year term of the bonds. The discount on the bonds is also being amortized on a straight-line basis over the 10 years. (Straight-line is not materially different in effect from the preferable “interest method”.) The bonds are callable at 101 (i.e., at 101% of face amount), and on January 2, 2010, Prebish called $1,000,000 face amount of the bonds and retired them. Ignoring income taxes, compute the amount of loss, if any, to be recognized by Prebish as a result of retiring the $1,000,000 of bonds in 2010 and prepare the journal entry to record the retirement.

(AICPA adapted)