A corporation issued 8% bonds with a par value of $1,120,000, receiving a $44,000 premium. On the interest date 5 years later, after the bond interest was paid and after 40% of the premium had been amortized, the corporation purchased the entire issue on the open market at 99 and retired it. The gain or loss on this retirement is:
A. $11,200 loss.
B. $37,600 gain.
C. $0.
D. $37,600 loss.
E. $11,200 gain.
Answer: B
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