Powell Company Owns an 80% Interest in Sauter, Inc

Multiple Choice

Powell Company owns an 80% interest in Sauter, Inc.On January 1, 2016, Sauter issued $400,000 of 10-year, 12% bonds at a premium of $50,000.On December 31, 2021, 5 years after original issuance, Powell purchased all of the outstanding bonds for $390,000.Both firms use the straight-line method of amortization. ​
What is the gain on retirement on the 2021 consolidated income statement?
​

A) ​$12,500
B) ​$22,500
C) ​$10,000
D) ​$35,000