A bond with a $$500,000$ maturity value is immediately retired for $$515,000$ plus accrued interest. The premium on bonds payable $($bond premlum$)$ at the

date is $$17,500.$ Which of the following statements is correct?

Multiple Choice

The gain or loss on the debt extinguishment can't be determined without knowing the dollar amount of the accrued interest.

The gain on the debt extinguishment is $$32,500.$

The loss on the debt extinguishment is $$32,500.$

The gain on the debt extinguishment is $$2,500.$