MSG Corporation Has $100,000 of 10-Year, 6% Bonds Outstanding on December

question 91

Multiple Choice

MSG Corporation has $100,000 of 10-year, 6% bonds outstanding on December 31, 2008. The bonds have 3 years remaining to maturity. The unamortized premium remaining on these bonds was $6,000. MSG uses straight-line amortization. On May 1, 2009, $10,000 of the bonds were retired at 112. How much, and what type of gain or loss, most likely results from this retirement?

• A)$667 ordinary loss.
• B)$667 extraordinary loss.
• C)$667 ordinary gain.
• D)$667 extraordinary gain.