Peter, Proprietor of Peter's Easy Loan Company, Loaned Jessie $4,000

Peter, proprietor of Peter's Easy Loan Company, loaned Jessie $4,000 on December 1, 2012. The loan is to be repaid on December 1, 2013, along with $600 interest. On July 10, 2013, Peter learns that Jessie has filed for personal bankruptcy and that non-secured creditors will receive only $0.60 on the dollar. Peter actually receives nothing until February 24, 2014. On that date, Peter receives a check for $1,000 from Jessie's bankruptcy proceedings in final settlement of the loan. How should Peter account for the loan to Jessie?

A) $1,600 short-term capital loss in 2013; and $1,400 short-term capital loss in 2014.
B) $3,000 ordinary loss in 2014.
C) $2,400 ordinary loss in 2013.
D) $1,600 ordinary loss in 2013; and $1,400 ordinary loss in 2014.
E) $3,000 short-term capital loss in 2014.