AAA Inc. issues $100,000 face value, 8% semiannual coupon bonds maturing in 10 years. The market initially prices these bonds to yield 6%. AAA Inc. buys back the bonds on the open market at the start of year 9, when the market yield on similar bonds is 7%. The bond buyback will result in AAA Inc. recording a:

Select one:

a. Cannot be determined from the information provided.

b. Neither a gain nor a loss on the retirement of the bonds

c. Loss on the retirement of the bonds.

d. Gain on the retirement of the bonds.