On January 1, 2022, Sean purchased an 8%, \($100,000\) corporate bond for \($92,277.\) The bond was issued on January 1, 2022, and matures on January 1, 2027. Interest is paid semiannually, and the effective yield to maturity is 10% compounded semiannually. On July 1, 2023, Sean sells the bond for \($95,949.\) A schedule of interest amortization for the bond is shown in Table I:5-3.

a. How much interest income must Sean recognize in 2022?

b. How much interest income must Sean recognize in 2023?

c. How much gain must Sean recognize in 2023 on the sale of the bond?

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TABLE 1:5-3 Interest Amortization for Problem 1:5-57 Interest Received (1) 6-30-22 $4,000 Amortization of Discount (2) $614 Interest Income (3) = (1) + (2) $4,614 12-31-22 4,000 645 4,645 6-30-23 4,000 677 4,677 12-31-23 4,000 711 4,711 6-30-24 4,000 747 4,747 12-31-24 4,000 783 4,783 6-30-25 4,000 823 4,823 12-31-25 4,000 864 4,864 6-30-26 4,000 907 4,907 12-31-26 4,000 952 4,952