Collins Company Borrowed $1,250,000 from BankTwo on January 1, 2016

Multiple Choice

Collins Company borrowed $1,250,000 from BankTwo on January 1, 2016 in order to expand its mining capabilities. The five-year note required annual payments of $325,545 and carried an annual interest rate of 9.5%. What is the amount of expense Collins must recognize on its 2017 income statement?

A) $118,750.
B) $99,105.
C) $87,821.
D) $77,591.