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  3. e13.12(lo 1,2)(entry for redemption of bond) on ja

E13.12(LO 1,2)(Entry for Redemption of Bond) On January 2,2020, Banno Corporation issued $1,500,000 of 10%...

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Accounting

E13.12(LO 1,2)(Entry for Redemption of Bond) On January 2,2020, Banno Corporation issued $1,500,000 of 10% bonds at 97 due December 31,2029. Interest on the bonds is payable annually
each December 31. The discount on the bonds is also being amortized on a straight-line basis over the 10 years. (Straight-line is not materially different in effect from the preferable "interest method.")
The bonds are callable at 101(i.e., at 101% of face value), and on January 2,2025, Banno called $900,000 face value of the bonds and redeemed them.
Instructions
Ignoring income taxes, compute the amount of loss, if any, to be recognized by Banno as a result of retiring the $900,000 of bonds in 2025 and prepare the journal entry to record the redemption.
(AICPA adapted)
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