Jones Company issued bonds with a $200,000 face value on January 1, 2016. The five-year term bonds were issued at 97 and had a 7 ½ % stated rate of interest that is payable in cash on December 31st of each year. Jones amortizes the bond discount using the straight-line method. Based on this information:
The amount of interest expense shown on Jones's December 31, 2016 income statement would be:
A. $16,200.
B. $21,000.
C. $15,000.
D. $13,800.
