The December 31, 2020, Statement of Financial Position of Cotton

Multiple Choice

The December 31, 2020, statement of financial position of Cotton Corporation includes the following: 9% bonds payable due December 31, 2026 $ 718,000
The bonds have a face value of $ 700,000, and were issued on December 31, 2019, at 103, with interest payable on July 1 and December 31 of each year. Cotton uses straight-line amortization to amortize bond premium or discount. On March 1, 2021, Cotton retired $ 280,000 of these bonds at 98 plus accrued interest. Ignoring income taxes, what should Cotton record as a gain on retirement of these bonds?

A) $ 7,560
B) $ 12,600
C) $ 12,800
D) $ 14,000