Use the Following Information for Questions

Multiple Choice

Use the following information for questions :
On January 1, 2012, Coté Limited issues a $27,232, 5% 3-year note payable. The note calls for three annual payments of $10,000, blended principal and interest. The first payment is to be made on December 31, 2012.
-On December 31, 2013, Coté will report interest expense of

A) $1,000.
B) $1,350.
C) $917.50.
D) $10,000.