Problem:

On September 1, 20X1, Stepout Hospital issued $4,000 (face value) of five-year, 9.6 percent bonds at 111 percent and accrued interest. Interest is payable semiannually, on April 1 and October 1, and the bonds mature on April 1, 20X6. On February 1, 20X2, $1,000 of these bonds are reacquired at 108 percent and accrued interest.

Required:

Question: What was the gain (loss) on the reacquisition of the bonds?

Note: Please provide reasons to support your answer.