On January 1, 2010, Lisa Co.issued $50, 000 of 9% ten-year bonds at 98.Issuance costs amounted to $2, 000.On July 1, 2015, all of the bonds were called at 103.What was the loss on bond retirement, assuming the use of straight-line amortization?

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The bonds were issued at a discount (98% of $50,000 = $49,000) and issuance costs were $2,000, so the initial carrying amount was $47,000. Over 5.5 years, $1,650 of the discount and issuance costs would be amortized (5.5/10 * $3,000), leaving a carrying amount of $48,650. The call price was $51,500 (103% of $50,000), resulting in a loss of $2,850 ($51,500 - $48,650).