On June 30, 2014, Island Inc had outstanding 1 . percent, $1,000,000 face amount, 15-year bonds maturing on June 30, 2019 . Interest is paid on June 30 and December 31 . and bond discount and bond issue costs are amortized on these dates. The unamortized balances on June 30, 2014, of bond discount and bond issue costs were $55,000 and $20,000, respectively. Island reacquired all of these bonds at
96 on June 30, 2014, and retired them. Ignoring income taxes, how much gain or loss should Island record on the bond retirement?
a. Loss of $15,000
b. Loss of $35,000
c. Gain of $5,000
d. Gain of $40,000
B
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