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What amount of gain or loss from retirement of debt

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Question - S company issued $200,000 of 8% 5-years bonds on January 1, 20x6. the discount on issuance was $12,000. Bond interest is paid annually on December 31, 20x8, Pumice Company purchased one-half of the outstanding bonds for 96000. both companies use the straight-line method of amortization.

What amount of gain or loss from retirement of debt will be reported on the 20x8 consolidated financial statements?

a- $1,600 gain

b- $1,600 loss

c- 1,200 gain

d- $1,200 loss

Reference no: EM131800473

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