On January 1, 2010, Jenny Corp. issued 1,000 of its 10%, $1,000 bonds for $1,040,000. These bonds had a maturity date of January 1, 2020 and were callable at 102 any time after December 31, 2014. Jenny paid interest semiannually on July 1 and January 1. Bond premium was amortized on a straight-line basis. On July 1, 2015, Jenny called all of the bonds and retired them. Before income taxes, Jenny's gain or loss in 2015 on this early extinguishment of debt was

a. $8,000 gain. b. $2,000 loss. c. $0. d. $20,000 gain. e. $1,000 loss.

On March 31, 2010, a calendar-year corporation sold 8% bonds with a face value of $6,000,000. These bonds mature in five years, and interest is paid annually on March 31. The bonds were sold for $5,536,000 to yield 10%. Using the effective interest method of computing interest, how much should be charged to interest expense in 2010?

a. $450,000. b. $360,000. c. $553,600. d. $415,200. e. $332,100.