On January 1, 2016, Patterson issued $500,000 of 6%, five-year bonds payable at 103. Patterson has extra cash and wishes to retire the bonds payable on January 1, 2017, immediately after making the second semiannual interest payment. To retire the bonds, Patterson pays the market price of 98. Requirements 1. What is Patterson's carrying amount of the bonds payable on the retirement date? 2. How much cash must Patterson pay to retire the bonds payable? 3. Compute Patterson's gain or loss on the retirement of the bonds payable. (Assume bonds payable are amortized using the straight-line amortization method.)

1. The carrying amount of the bonds payable on the retirement date is $__.

2. How much cash must Patterson pay to retire the bonds payable?

- To retire the bonds, Patterson must pay $___.

3. Patterson's gain or loss on the retirement of the bonds payable is $__.