Problem:
On October 1, 20X1, Scott Hospital issued $1,000 (face value) of 7.2 percent, five-year term bonds at 100 percent and accrued interest. Issue costs were $55. Interest is payable semiannually, on May 1 and November 1, and the bonds mature on May 1, 20X6. On January 1, 20X2, $250 (face value) of these bonds were reacquired at 104 percent and accrued interest.
Required:
Question: What was the gain (loss) on the reacquisition of the bonds?
Note: Please show how you came up with the solution.