1. 7) On January 1, 2015, Red Company issued an 8% callable bond which has a par value of $100,000 for $90,000. The bond is callable at 104 any time after January 1, 2020. The entire bond was called back on January 1, 2021 when the unamortized discount had a balance of $1,300. Compute the amount of the gain or loss when the bond was retired on January 1, 2021.

1. 8) If a company uses the straight-line method of amortization, the interest expense per period will be the same throughout the life of the bond regardless whether the bond was issued at a discount or a premium. (True/False)

1. 9) A bond was issued on May 1, 2021. The interest dates of the bond are February 1 and August 1. The number of total months of interest expense incurred for the year ended December 31, 2021 should be?