Jack borrows $13,000 from Sawyer Savings and Loan and uses the proceeds to acquire a used car. When the loan balance is $12,000, Jack loses his job and is unable to make payments for three months. When Jack gets a new job, the bank agrees to forgive the missed principal payments and reduces his loan to $11,500. Jack remains solvent even when unemployed. How much cancellation of debt income does Jack have?

a. $0

b. $500

c. $1,500

d. $2,000