Nivan Co. issued $500,000 of 5 percent, 10-year, callable bonds on January 1, Year 1, at their face value. The call premium was 3 percent (bonds are callable at 103). Interest was payable annually on December 31. The bonds were called on December 31, Year 5.

Required
a. Calculate the amount of interest expense for Year 5.
b. Determine the amount of loss on bond redemption recognized on December 31, Year 5.