On January 1, 2020, Sandollar Inc, issued $48.000 of bonds at 98, paying 8% cash interest semiannually on June 30 and December 31. The bonds are scheduled to mature December 31, 2023. The straight-line interest method is used to amortize bond discounts or premiums. On June 30. 2021, the bonds have a remaining discount of $600. On July 1. 2021, 548.000 of the bonds were retired when the bonds were selling at 101.

The amount of gain or loss on the early redemption of the bonds is

1. A gain of $480.
2. A gain of $1.080.
3. A loss of $480.
4. A loss of $1.080