Holt Company received proceeds of $155,000 on 5-year, 10% bonds issued on January 1, Year 1. The bonds had a face value of $150,000, pay interest semi-annually on June 30 and December 31st, and have a call price of 105. Holt Company decided to redeem the bonds on January 1, Year 2 at which time the amortized cost was $153,263. What amount of gain or loss would Holt report on their Year 2 income statement?

a) $3,263 loss

b) $4,237 loss

c) $3,263 gain

d) $7,500 loss