On January $1$ of Year $1,$ Pitt Company acquired the following bonds, which Pitt was uncertain as to how long to hold the security.

Security Purchase Price Face Value Purchased

Hollywood $5\%$ bonds, maturity date January $1,$ Year $11$ $$721,978$ $$780,000$

The bonds pay interest semiannually on June $30$ and December $31.$ Premiums and discounts are amortized using the e$$ective interest method and a market rate of $6\%.$ The fair value of the bonds was $$715,000$ on December $31$ of Year $1.$