Question: On July 1, 2017, Tilapia Corp. had outstanding 8%, $1,000,000, 10-year bonds maturing on June 30, 2027. Interest is payable semi-annually on June 30 and December 31. Assume all appropriate entries had been prepared and posted at June 30, 2018. The carrying value of the bond at June 30, 2018 was $965,000. At this time, Tilapia purchased all the bonds at 94 and retired them. What is the gain or loss on this early extinguishment of debt?
a) $60,000 gain
b) $35,000 loss
c) $25,000 gain
d) $25,000 loss
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