Bonds Payable has a balance of $1,072,000 and Discount on Bonds Payable has a balance of $12,864. If the issuing corporation redeems the bonds at 98, what is the amount of gain or loss on redemption?

a.$8,576 gain

b.$12,864 gain

c.$8,576 loss

d.$12,864 loss

Franklin corporation issues $92,000, 8%, 5-year bonds on January 1, for $96,140. Interest is paid semiannually on January 1 and July 1. If Franklin uses the straight-line method of amortization of bond premium, the amount of bond interest expense to be recognized on July 1 is

a.$3,680

b.$4,094

c.$7,360

d.$3,266