Theresa,a Cash Basis Taxpayer,purchased a Bond on July 1,2012,for $10,000,plus

Theresa,a cash basis taxpayer,purchased a bond on July 1,2012,for $10,000,plus $400 of accrued interest.The bond paid $800 of interest each December 31.On March 31,2016,she sold the bond for $9,800,which included $200 of accrued interest.

A) Theresa has $200 interest income and a $400 loss from the bond in 2016.
B) Theresa has $200 interest income and a $200 gain from the bond in 2016.
C) Theresa has a $100 loss from the sale of the bond and no interest income.
D) Theresa's loss on the sale of the bond is $600.
E) None of these.