On January 1 of Year 1, Lily 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. Accordingly, the bond was issued at a discount of $1,494. This bond was retired on January 1 of Year 3, just one day after thesecondcoupon payment was made. The total amount paid to retire this bond was $9,700. Lily uses the effective-interest method on its books. Note: Round all calculations to the nearest dollar. The entry to record theretirement of this bondwould include a

DEBIT to Loss on Bond Retirement of $1,450.

DEBIT to Loss on Bond Retirement of$1,150.

DEBIT to Discount on Bonds of $1,550.

CREDIT to Discount on Bonds of $1,650.

CREDIT to Discount on Bonds of $1,250.