Exercise 14-12

On January 2, 2015, Sunland Corporation issued $1,850,000 of 10% bonds at 96 due December 31, 2024. 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 amount), and on January 2, 2020, Sunland called $1,110,000 face amount of the bonds and redeemed them.

Ignoring income taxes, compute the amount of loss, if any, to be recognized by Sunland as a result of retiring the $1,110,000 of bonds in 2020. (Round answer to 0 decimal places, e.g. 38,548.) Loss on redemption $enter a dollar amount of loss on redemption rounded to 0 decimal places

Prepare the journal entry to record the redemption. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)