On 7/1/21 Fox issues $1m, 6%, at 95, convertible to 100,000 $2 par value common shares with a market price of $9. One year later, bondholders convert all bonds when market value is at 97, book value is 96 and common stock market value is at $11. How much gain does Fox record on this conversion?

A) $0 B) $20,000 C) $10,000 D) $40,000