Problem:
On June 30, 2011, Rix Corporation had $10,000,000 of 9 percent bonds outstanding. The maturity date is June 30, 2016.. Interest is paid semiannually every June 30 and December 31. All the bonds were redeemed on June 30, 2011, at 98. At the time of the bond redemption, there was unamortized bond premium of $60,000 and unamortized bond issue costs of $100,000.
Required:
Question: What is the amount of the gain on the bond redemption?
Note: Please provide through step by step calculations.