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Soap Company issued $200,000 of 8%, 5-year bonds on January 1, 2016. The discount on...

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Accounting

Soap Company issued $200,000 of 8%, 5-year bonds on January 1, 2016. The discount on issuance was $12,000. Bond interest is paid annually on December 31. On December 31, 2018, Pumice Company purchased one-half of the outstanding bonds for $96,000. Both companies use the straight-line method of amortization. What amount of gain or loss from retirement of debt will be reported on the 2018 consolidated financial statements? a. $1,600 loss b. $1,600 gain c. $1,200 gain d. $1,200 loss

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