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

Multiple Choice

Bonds Payable has a balance of $1,000,000 and Discount on Bonds Payable has a balance of $15,000. If the issuing corporation redeems the bonds at 97.5, what is the amount of gain or loss on redemption?

A) $10,000 loss
B) $25,000 loss
C) $25,000 gain
D) $10,000 gain