Reference no: EM132832344

On January 2, 2015, Blue Corporation issued $1,050,000 of 10% bonds at 97 due December 31, 2024. 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 102 (i.e., at 102% of face amount), and on January 2, 2020, Blue called $630,000 face amount of the bonds and redeemed them.

Problem 1: Ignoring income taxes, compute the amount of loss, if any, to be recognized by Blue as a result of retiring the $630,000 of bonds in 2020. (Round answer to 0 decimal places, e.g. 38,548.)

Problem 2: Prepare the journal entry to record the redemption.