The Rondo Corporation has outstanding $400,000 of 8 percent bonds callable at104. On September 1, immediately after recording the payment of the semiannual interest and the amortization of the discount, the unamortized bond discount equaled $10,500. On the date, $240,000 of the bonds was called and retired.

1. How much cash must be paid to retire the bonds?

2. Is there a gain or loss on retirement, and if so, how much is it?