Granite Company Issued $200,000 of 10 Percent First Mortgage Bonds

Granite Company issued $200,000 of 10 percent first mortgage bonds on January 1, 20X4, at 105. The bonds mature in 10 years and pay interest semiannually on January 1 and July 1. Mortar Corporation purchased $140,000 of Granite's bonds from the original purchaser on December 31, 20X8, for $125,000. Mortar owns 75 percent of Granite's voting common stock. Granite's partial bond amortization schedule is as follows: Based on the information given above, what amount of gain or loss on constructive bond retirement will be reported in the December 31, 20X8 consolidated financial statements?

A) $8,892 loss
B) $81,108 loss
C) $19,276 gain
D) $81,108 gain