On December 31, 2015, Net Co. is in financial difficulty and cannot pay a note due that day. It is a $600,000 note with $60,000 accrued interest payable to Pier, Inc. Pier agrees to accept from Net a building that has a fair value of $590,000, an original cost of $530,000, and accumulated depreciation of $130,000.

Net should recognize a gain on the settlement of the debt of