Sparks Company Received Proceeds of $634,500 on 10-Year, 8% Bonds

Multiple Choice

Sparks Company received proceeds of $634,500 on 10-year, 8% bonds issued on January 1, 2019.The bonds had a face value of $600,000, pay interest annually on December 3t, and have a call price of 102.Sparks uses the straight-line method of amortization.Sparks Company decided to redeem the bonds on January 1, 2021.What amount of gain or loss would Sparks report on their 2021 income statement?

A) $27,600 gain
B) $15,600 gain
C) $15,600 loss
D) $27,600 loss