Aire Corporation Retires Its Bonds at 106 on January 1

Aire Corporation retires its bonds at 106 on January 1, following the payment of semi-annual interest. The face value of the bonds is $800,000. The carrying value of the bonds at the redemption date is $842,000. The entry to record the redemption will include a

A) credit of $42,000 to Loss on Bond Redemption.
B) debit of $48,000 to Premium on Bonds Payable.
C) credit of $7,000 to Gain on Bond Redemption.
D) debit of $42,000 to Premium on Bonds Payable.