Sandhill Company purchased $2800000 of 7%, 5-year bonds from Whispering, Inc. on January 1, 2021, with interest payable on July 1 and January 1. The bonds sold for $2924740 at an effective interest rate of 6%. Using the effective-interest method, Sandhill Company decreased the Available-for-Sale Debt Securities account for the Whispering, Inc. bonds on July 1, 2021 and December 31, 2021 by the amortized premiums of $10220 and $10580, respectively.
At February 1, 2019, Sandhill Company sold the Carlin bonds for $1316800. After accruing for interest, the carrying value of the Carlin bonds on February 1, 2019 was $1320500. Assuming Sandhill Company has a portfolio of available-for-sale debt investments, what should Sandhill Company report as a gain (or loss) on the bonds?
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