a government issued, at par, $10million of 20years 6percent bonds that it accounts for in its electric utility fund. the bond do not contain a call provision. Ten years later prevailing interest rate have fallen to 5%. The government is considering whether to purchase the outstanding bonds at their market price and retire them. it would aquire the neccessary funds by issuing new ten years ,5% bond. The transaction would most likely result in:

a) an economic gain but an accounting loss

b) an economic los but an accounting gain

c) an economic gain and an accounting loss

d) neither an economic gain or loss but an accounting loss