On January 1, 2015, Leslie Co. issued $100,000 of 8% ten-year bonds at 97. Issuance costs amounted to $2,000. On July 1, 2020, 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 (97% of $100,000 = $97,000), and issuance costs were $2,000, making the net proceeds $95,000. The discount and issuance costs are amortized over 10 years. By July 1, 2020, 5.5 years of amortization have occurred. The unamortized discount and issuance costs are calculated, and the bonds are called at 103% of $100,000, which is $103,000. The loss is the difference between the call price and the carrying amount of the bonds.