On January 1, 20X1, Henefer Company issued a $10,000, 10%, 20-year bond. Interest is paid annually each December 31, so the first coupon payment was made on December 31 of Year 1. On the day the bond was issued, the market interest rate on bonds with the same degree of riskiness was 12% compounded annually. This bond was retired on January 1, 20X3, just one day after the SECOND coupon payment was made. The total amount paid to retire this bond was $9,700. Henefer uses the effective-interest method on its books. Which one of the following should be included in the journal entry necessary to record the RETIREMENT OF THIS BOND on January 1, 20X3, just one day after the SECOND coupon payment was made? Note: Round all calculations to the nearest dollar.

• DEBIT to Loss on Bond Retirement of $1,150
• DEBIT to Loss on Bond Retirement of $1,450
• DEBIT to Discount on Bonds of $1,550
• CREDIT to Discount on Bonds of $1,650