On January 1, 2016, Fox Corp. issued 1,000 of its 10%, $1,000 bonds for $1,040,000. These bonds were to mature on January 1, 2026, but were callable at 102 any time after December 31, 2019. Interest was payable semiannually on July 1 and January 1. After 5 1/2 years, on July 1, 2021, Fox called all of the bonds and retired them. Bond premium was properly amortized on a straight-line basis over 10 years. Before income taxes, Fox's gain or loss in 2021 on this early extinguishment of debt was

Select one:

a.

$30,000 gain

b.

$2,000 loss

c.

$12,000 gain

d.

$10,000 gain

e.

$8,000 gain