(Answered) Question - 8 year bonds with a face value of 1000000 were

Accounting

Question - 8 year Bonds with a Face Value of $1,000,000 were issued on January 1 , 2004 for 96. Interest is paid on the Bonds semi-annually on June 30, and December 31 and Discount/Premium is amortized using the straight-line method. The Bonds are redeemed 51/2 years later at 98. If the Amortization of Discount/Premium is recorded up to date, determine the gain or loss on redemption of the bonds.

a. $7,500 loss

b. $34,500 loss

c. $7,500 gain

d. $34,500 gain

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