Answer:
The bond discount at issuance is calculated as follows: $846,000 - ($846,000/100 *98)
The bond discount upon issuance is $846,000 minus $829,080
Thus, the bond discount at issuance equals $16,920
Bond Payable = $846,000
The un-amortized bond discount calculates to $16,920 - $9,840
This gives an un-amortized bond discount of $7,080
The redemption value of the bond is determined by 102/100 * $846,000
Thus, the redemption value of the bond is $
862,920
Finally, the loss on bond retirement is given by the difference between the redemption value and (Bond Payable - Un-amortized bond discount)
Loss on retirement of the bond = $862,920 - ($846,000 - $7,080)
The loss on retirement of the bond calculates to $862,920 - $838,920
This results in a loss of $24,000
