ScottishCo Is Owned by Gordon Bryson and His Four Nieces

ScottishCo is owned by Gordon Bryson and his four nieces and nephews.Gordon owns all the voting stock.He wants to relinquish control;accordingly,ScottishCo redeems all of Gordon's voting common stock and issues him preferred stock and $50,000 in bonds.The nonvoting preferred shares owned by the nieces and nephew are exchanged for voting common stock.Which of the following statements is correct?

A) None of this transaction is taxable because it qualifies as a "Type E" reorganization.
B) The exchange of common for preferred is not taxable but the exchange of preferred stock for common stock is taxable.
C) The exchange of common stock for a bond is taxable.
D) All of these transactions are taxable.
E) None of the above statements is correct.