Didde Company issues $20,000,000 face value of bonds at 95 on January 1, 2013. The bonds are dated January 1, 2013, pay interest semiannually at 8% on June 30 and December 31, and mature in 10 years. Straight-line amortization is used for discounts and premiums. On May 1, 2016, $12,000,000 of the bonds are called at 102 plus accrued interest. What gain or loss would be recognized on the called bonds on September 1, 2016?

a. $1,200,000 loss

b. $564,000 loss

c. $700,000 loss

d. $640,002 loss