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On January 1, 2020, Naples Co. issued $280,000 of 10-year bonds at 96. The bonds pay 6% cash interest annually on December 31. The company

On January 1, 2020, Naples Co. issued $280,000 of 10-year bonds at 96. The bonds pay 6% cash interest annually on December 31. The company retired 30% of the bonds on June 1, 2020, when the bonds were selling at 90 plus accrued interest. Assume the straight-line interest method is used to amortize the bond discount. What is the gain recognized on the redemption of the bonds? Select one: a. $5,208 gain O b. $8,400 gain c. $5,180 gain 0 d. $5,040 gain

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