On January 1, 2021, Idaho Company issued 11% bonds, dated January 1st with a face

amount of $800,000. The bonds sold for $739,820 and mature in 20 years. For bonds of

similar risk and maturity th

e market yield was 12%. Interest is paid semiannually on

June 30 and December 31. Idaho decides to amortize the bond discount under the

straight line approach and elects the option to report these bonds at their fair value. On

December 31, 2021, the fai

r value of the bonds was $730,000, and the change in fair

value was a result of a change in general interest rates. The gain or loss Idaho Company

would report on its 2021 income statement relative to the bonds is closest to:

A)

$12,829 gain

B)

$9,820

gain

C)

$70,000 gain

D)

$3,009 loss