On January 1, 2022, Gorski Corp. purchased $1,000,000, 10% bonds for $1,040,000. These bonds were to mature on January 1, 2032, but were redeemable at 101 any time after December 31, 2025. Interest was payable semiannually on July 1 and January 1. On July 1, 2027, Gorski sold all of the bonds. Bond premium was amortized on a straight-line basis. Gorskis gain or loss in 2027 was:

Select one:

a.

$30,000 loss

b.

$12,000 loss

c.

$10,000 gain

d.

$8,000 loss

e.

$12,000 gain