On February $1,2023,$ Pat Weaver Incorporated $($PWI$)$ issued $11\%,$$$1,700,000$ bonds for $$2,000,000,$ PWI retired all of these bonds on January $1,2024,$ at $104.$ Unamortized bond premium on that date was $$176,800.$ How much gain or loss should be recognized on this bond retirement?

Multiple Choice

$$187,000$ gain

$$108,800$ loss

$$108,800$ gain

$$220,000$ gain

On January $1,2024,$ Central Industries leased a high$-$performance conveyer to Dynamic Company for a four$-$year period ending December $31,2024,$ at which time possession of the leased asset will revert back to Central. The equipment cost Central $$3,346,000$ and has an expected useful life of $5$ years. Central expects the residual value on December $31,2028,$ will be $$1,050,000.$ Negotiations led to the lessee guaranteeing a $$1,122,500$ residual value.

Equal payments under the finance$/$sales$-$type lease are $$700,000$ and are due on December $31$ of each year with the first payment being made on December $31,2024.$ Dynamic is aware that Central used a $5\%$ interest rate when calculating lease payments.

Note: Use tables, Excel, or a financial calculator. $($FV of $$1,$ PV of $$1,$ FVA of $$1,$ PVA of $$1,$ FVAD of $$1$ and PVAD of $$1)$

Required:

Prepare all appropriate journal entries for Dynamic Company to record the arrangement at its commencement, January $1,2024,$ and on December $31,2024.$

Prepare all appropriate journal entries for Central Industries to record the arrangement at its commencement, January $1,2024,$ and on December $31,2024.$