Jones Company Issued Bonds with a $200,000 Face Value on January

Multiple Choice

Jones Company issued bonds with a $200,000 face value on January 1, Year 1. The five-year term bonds were issued at 97 and had a 7½% stated rate of interest that is payable in cash on December 31^st of each year. Jones amortizes the bond discount using the straight-line method. Based on this information:The total amount of liabilities shown on Jones's December 31, Year 2 balance sheet would be:

A) $191,600.
B) $194,000.
C) $196,400.
D) $195,200.