a. How much interest expense will be eliminated? Bond carrying amount $86,600 Effective interest rate 11% Interest expense to be eliminated $9,526 b. How much interest income will be eliminated? Original bond purchase amount $114,500 Original effective interest rate 8% Interest income to be eliminated $9,160 c. Calculate the gain or loss on the retirement of the bonds. Original purchase price $114,500 Carrying amount at the date of the acquisition $86,600 Loss to be recognized $27,900