Hurley Co. has outstanding $8 million face amount of 9% bonds that were issued on January 1, 2004, for $7,760,000. The 20-year bonds mature on December 31, 2023, and are callable at 102 (that is, they can be paid off at any time by paying the bondholders 102% of the face amount).

b-1. Assume that the bonds are called on December 31, 2016. Use the horizontal model to show the effect of the retirement of the bonds. (Use amounts with + for increases and amounts with for decreases.) (Hint: Calculate the amount paid to bondholders; then determine how much of the bond discount would have been amortized prior to calling the bonds; and then calculate the gain or loss on retirement.)