b$.$ Amortize the loss over the remaining life of either the existing debt or the new debt

c$.$ Report the loss as a direct charge to net position

d$.$ Not recognize the loss, but instead continue to report the defeased bonds $($as well as the new bonds$)$ as liabilities

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

a$.$ An economic gain but an accounting loss

b$.$ An economic loss but an accounting gain

c$.$ An economic gain and an accounting loss

d$.$ Neither an economic gain or loss but an