On January 1, XYZ Company issued 8%, 10 year Bonds with a Face Value of $680,000 at 97. Four years later, XYZ redeemed these bonds by repurchasing them at 98(Amortization of discount/premium has been recorded up to date). The journal entry recorded by XYZ on the date of redemption would include a:
a. Debit to Loss on Redemption of Bonds $13,600
b. Debit to Loss on Redemption of Bonds $6,800
c. Credit to Gain on Redemption of Bonds $5,440
d. Credit to Gain on Redemption of Bonds $1,360
Please explain how you determined your answer.