How was the book value calculated? Why the the book value is not 1,022,000 since that is the outstanding value on that day?

On January 1, 2011, Fox Corp. issued 1,000 of its 10%, $1,000 bonds for $1,040,000. These bonds were to mature on January 1, 2021, but were callable at 101 any time after December 31, 2013. Interest was payable semiannually on July 1 and January 1. On July 1, 2016, Fox called all of the bonds and retired them. Bond premium was amortized on a straight-line basis. Before income taxes, Fox's gain or loss in 2016 on this early extinguishment of debt was $12,000 gain O $30,000 gain $8,000 gain $10,000 loss Must determine book value at time of extinguishment: $40,000 Bond premium at issue Amortization of premium 1/1/2011 through 7/1/2016 $40,000 20 = $2,000 per period $2,000 11 periods Unamortized premium 7/1/2016 Face value Book value 7/1/2016 Call (redemption) price 22,000 $18,000 1,000,000 $ 1,018,000 1,010,000 $1,000,000 x 1.01 Gain on extinguishment $8,000