Problem
On July 1, 2016, Aldrich Company purcahsed as an available for sale security $200,000 face value, 9% U.S Treasury notes for $194,000. The notes mature July 1, 2017, and payinterest semiannually on January 1 and July 1. The notes were sold on December 1, 2016, for $199,000. Aldrich normally uses straight-line amortization on all of its notes. In its income statememt for the year ended December 31, 2016, what amount should Aldrich report as a gain on the sale of teh available for sale security?