On January 1, 2021, Yellow Company issued a 4% $100,000 bond for $94,000. The market rate for a bond of this type is 5%. The bond pays interest semi-annually on June 30 and December 31. The bond is a 5-year bond.

1. Use the data above. What is the carrying value of the bond on December 31, 2024 assuming the company uses the straight-line method of amortization?

2. Use the data above. What is the total interest expense over the life of this bond assuming the straight-line method of amortization?

3. On January 1, 2015, Red Company issued an 8% callable bond which has a par value of $200,000 for $185,000. The bond is callable at 106 any time after January 1, 2020. The entire bond was called back on January 1, 2021 when the unamortized discount had a balance of $4,500. Compute the amount of the gain or loss when the bond was retired on January 1, 2021.