On January 1, 20x1, ABC Co. acquired 14%, 1,000,000 bonds for 1,099,474. The principal is due on December 31, 20x3 but interest is due annually starting December 31, 20x1. The effective interest rate on the bonds is 10%. The bonds are classified as investment measured at amortized cost. 1. How much is the carrying amount of the investment on December 31, 20x2? 2. Assume that half of the investment was sold on January 1, 20x2 for 480,000. Transaction costs incurred on the sale amounted to 15,000. How much is the gain (loss) on the sale?