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On January $2,2018,$ Sunland Corporation, a small company that follows ASPE, issued $$2\mathrm{.}6$ million of $7\%$ bonds at $98$ due on December $31,2027.$ Legal and other costs of $$260,000$ were incurred in connection with the issue. Sunland has a policy of capitalizing and amortizing the legal and other costs incurred by including them with the bond recorded at the date of issuance. Interest on the bonds is payable each December $31.$ The $$260,000$ of issuance costs are being deferred and amortized on a straight$-$line basis over the $10$ year term of the bonds. The discount on the bonds is also being amortized on a straight$-$line basis over the $10$ years. $($The straight$-$line method is not materially different in its effect compared with the effective interest method.$)$

The bonds are callable at $105($that is$,$ at $105\%$ of their face amount$),$ and on January $2,2023,$ the company called a face amount of $$1,400,000$ of the bonds and retired them.

$($a$)$

Ignoring income taxes, calculate the amount of loss, if any, that the company needs to recognize as a result of retiring $$1,400,000$ of bonds in $2023.$ Prepare the journal entry to record the retirement. $($Round answer to $0$ decimal places, e$.$g$.5,275.$ Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account titles and enter $0$ for the amounts. List all debit entries before credit entries.$)$

Date Account Titles and Explanation

Debit

Credit

Jan. $2,$

$2023$

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