In November of 2016, Mr. Jolly received $100,000 on the redemption of some matured corporate bonds (stated interest rate of 5%) issued by the Target Corporation. That is, Target paid Mr. Jolly $100,000 and he gave the bonds back to Target.

During 2016 Mr. Jolly received a total of $5,000 in cash interest payments related to the bonds. He had purchased the bonds several years earlier for $94,600.

How much income should Mr. Jolly recognize on his annual tax return for 2016 due to these bonds?

		$105,000
		$5,000
		$5,400
		$10,400