Last year Katie purchased a 9% corporate bond for its par value of $1,000. This year Katie received coupon payments totaling $90. What is the tax consequence for Katie this year, and what is her cost basis at the end of this year?

A. $90 short-term capital gain this year, cost basis $1,000.

B. $90 short-term capital gain this year, cost basis $1,090.

C. $90 ordinary income this year, cost basis $1,000.

D. $90 ordinary income this year, cost basis $1,09