On January 1, 2008, Fox Corp. issued 1,000 of its 10%, $1,000 bonds for $1,040,000. These bonds

Question:

On January 1, 2008, Fox Corp. issued 1,000 of its 10%, $1,000 bonds for $1,040,000. These bonds were to mature on January 1, 2018, but were callable at 101 any time after December 31, 2011. Interest was payable semiannually on July 1 and January 1. On July 1, 2013, Fox called all of the bonds and retired them. Bond premium was amortized on a straight-line basis. Before income taxes, Fox's gain or loss in 2013 on this early extinguishment of debt was
a. $ 8,000 gain
b. $10,000 loss
c. $12,000 gain
d. $30,000 gain