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On January 1,2020, Novak Corporation issued $5,180,000 of 10% bonds at 102 due December 31,2029....

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Accounting

On January $1, 2020,$ Novak Corporation issued $ $5, 180, 000$ of $10 %$ bonds at $102$ due December $31, 2029 .$ Novak paid $ $74, 000$ in bond issue costs when the bonds were issue to the market. These will be amortized over the life of the bond. The premium 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 $106 ($ i $.$ e $.,$ at $106 %$ of face amount $),$ and on January $2, 2025,$ Novak called one $-$ half of the bonds and retired them.

Ignoring income taxes, compute the amount of loss, if any, to be recognized by Novak as a result of retiring the $ $2, 590, 000$ of bonds in $2025 .$

Loss on redemption

$

Prepare the journal entry to record the retirement. $($ If no entry is required, select $"$ No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. $)$

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