Bonds Payable Has a Balance of $1,000,000 and Premium on Bonds

Multiple Choice

Bonds Payable has a balance of $1,000,000 and Premium on Bonds Payable has a balance of $7,000. If the issuing corporation redeems the bonds at 101, what is the amount of gain or loss on redemption?

A) $3,000 loss
B) $3,000 gain
C) $7,000 loss
D) $7,000 gain