_____ a 100%-Owned Subsidiary Acquired in the Open Market 40

_____ A 100%-owned subsidiary acquired in the open market 40% of its parent's outstanding 8% bonds for $395,000. The outstanding bonds have a face value of $1,000,000 and a carrying value of $960,000 on the acquisition date. The gain or loss to be reported in the consolidated income statement in the bond acquisition year is

A) A gain of $11,000.
B) A loss of $11,000.
C) A gain of $21,000.
D) A loss of $21,000.
E) None of the above.