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