7/1/2015, individual John acquires in the open market a bond of corporation xyz having stated redemption price of $10,000 and maturity date of 12/31/2017 for $9000.On 12/31/2016, when the bond has accrued market discount of $600. a sell the bond for $8500.(1)How much interest income does John recognize in 2016?(2)how much capital gain or loss does John recognize upon the sale of the bond? Assume the bond is capital asset in John’s hands.
Sample Solution
