To determine the gain or loss on the redemption of the bonds, you need to compare the redemption price to the carrying value of the bonds. The carrying value of the bonds is the amount that the bonds are recorded as being worth on the issuing corporation's balance sheet. This is calculated by adding the Bonds Payable balance and the Premium on Bonds Payable balance.
In this case, the carrying value of the bonds is $810,000 + $8,910 = $818,910. If the bonds are redeemed at a price of $102, the gain or loss on the redemption can be calculated as follows:
Gain or loss on redemption = Redemption price - Carrying value of bonds
= $102 - $818,910
= -$817,810
Since the gain or loss on the redemption is a negative number, this indicates that the redemption price was lower than the carrying value of the bonds, resulting in a loss. The correct answer is therefore: c. $7,290 loss.