Several years ago, Timmins Inc. issued $250,000 of 10-year bonds at a discount. The company decides to redeem the bonds at 98 when the amortized cost is $248,000. Would there be a gain or a loss on redemption of the bonds, and how much would it be?

• A :

  a gain on redemption of $3,000

• B :

  a gain on redemption of $2,000

• C :

  a loss on redemption of $3,000

• D :

  a loss on redemption of $2,000