On January $1,2015,$ Pharoah Corporation issued $$4,870,000$ of $10\%$ bonds at $101$ due December $31,2024.$ Legal and other costs of

$$82,000$ were incurred in connection with the issue. Interest on the bonds is payable annually each December $31.$ The $$82,000$ issue

costs are being deferred and amortized on a straight$-$line basis over the $10-$year term of the bonds. The premium 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 $105($i$.$e$.,$ at $105\%$ of face amount$),$ and on January $2,2020,$ Pharoah called one$-$half of the bonds and retired

them.

Ignoring income taxes, compute the amount of loss, if any, to be recognized by Pharoah as a result of retiring the $$2,435,000$ of bonds

in $2020.$

Loss on redemption $

Prepare the journal entry to record the retirement. $($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.$)$

Date

Account Titles and Explanation

January $2,2020$

Debit

Credit

Credit