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Blossom Company purchased $2900000 of 8%, 5-year bonds from Sunland, Inc. on January 1, 2021, with interest payable on July 1 and January 1. The
Blossom Company purchased $2900000 of 8%, 5-year bonds from Sunland, Inc. on January 1, 2021, with interest payable on July 1 and January 1. The bonds sold for $3026740 at an effective interest rate of 7%. Using the effective-interest method, Blossom Company decreased the Available-for-Sale Debt Securities account for the Sunland, Inc. bonds on July 1, 2021 and December 31, 2021 by the amortized premiums of $10420 and $10780, respectively. At April 1, 2022, Blossom Company sold the Sunland bonds for $2990000. After accruing for interest, the carrying value of the Sunland bonds on April 1, 2022 was $2997440. Assuming Blossom Company has a portfolio of Available-for-Sale Debt Securities, what should Blossom Company report as a gain or loss on the bonds? $-21200. $-7440. $0. $-126740
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