Hurst, Inc. sold its 8% bonds with a maturity value of $9,000,000 on August 1, 2019 for $8,838,000. At the time of the sale the bonds had 5 years until they reached maturity. Interest on the bonds is payable semiannually on August 1 and February 1. The bonds are callable at 104 at any time after August 1, 2021. On October 1, 2021, Hurst decides to reacquire $1,500,000 of its 8% bonds at 101. The remainder of the outstanding bonds is reacquired by exercising the bonds' existing call feature.

Instructions:

1. How much was the gain or loss experienced by Hurst in reacquiring its 8% bonds? (Assume the firm used straight-line amortization.) Show calculations.

2. What is the entry to record the reacquisition and cancelation of the bonds?