Willy pursued a hobby of making bedspreads in his spare time. His AGI before considering the hobby is $38,000. During the year he sold the bedspreads for $10,000. He incurred expenses as follows:

Supplies $4,000

Interest on loan to get business started 500

Advertising 6,500

Assuming that the activity is deemed a hobby, how should Willy report these items on his tax return?