48. Chee purchases Tan, Inc. bonds for $108,000 on January 2, 2016. The face value of the bonds is $100,000, the maturity date is December 31, 2020, and the annual interest rate is 5%. Chee will amortize the premium only if he is required to do so. Chee sells the bonds on July 1, 2018, for $106,000.

(a) Determine the interest income Chee should report for 2016.

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(b) Calculate Chees recognized gain or loss on the sale of the bonds in 2018.