Beonce Company Received Proceeds of $188,000 on 10-Year, 6% Bonds

Multiple Choice

Beonce Company received proceeds of $188,000 on 10-year, 6% bonds issued on January 1, 2016. The bonds had a face value of $200,000, pay interest annually on January 1, and have a call price of 101. Beonce uses the straight-line method of amortization. Beonce Company decided to redeem the bonds on January 1, 2018. What amount of gain or loss would Beonce report on its 2018 income statement?

A) $9,600 gain
B) $11,600 gain
C) $11,600 loss
D) $9,600 loss