On January 2, 2020, Banno Corporation issued $1,500,000 of 10% bonds at 97 due December 31, 2029. Interest on the bonds is payable annually each December 31. 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 value), and on January 2, 2025, Banno called $900,000 face value of the bonds and redeemed them.

Instructions

Ignoring income taxes, compute the amount of loss, if any, to be recognized by Banno as a result of retiring the $900,000 of bonds in 2025 and prepare the journal entry to record the redemption.