Question: Fox did not elect the fair value option for reporting its financial liabilities. On July 1, 2010, Fox called all of the bonds and retired

Fox did not elect the fair value option for reporting its financial liabilities. On July 1, 2010, 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 2010 on this early extinguishment of debt was

a. $30,000 gain.

b. $12,000 gain.

c. $10,000 loss.

d. $ 8,000 gain.

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