A Government Has $1,000,000 of 6%, 10-Year General Obligation Bonds

Multiple Choice

A government has $1,000,000 of 6%, 10-year general obligation bonds outstanding. The bonds were issued on November 1, 20X7 to finance construction of a general capital asset. Interest is payable semiannually on November 1 and May 1. The bonds also require an annual principal payment of $100,000 on May 1. What amount of debt service expenditures should the government report for the year ended December 31, 20X8?

A) $60,000.
B) $90,000.
C) $160,000.
D) $190,000.