Use the Following Information to Answer Questions

Multiple Choice

Use the following information to answer questions
On July 1, 2010, L Co. purchased, as an investment, $100,000 of T Co.'s just-issued 10%, 20-year bonds payable. The bonds pay interest annually on June 30. L Co. intends to hold the bonds to maturity. L Co. uses the straight-line method to amortize and bond discounts or premiums.
-If L Co. paid $97,000 for the bonds, at December 31, 2010, L Co. will show its Investment in Bonds account at

A) $100,000 with a Discount on Bond Investment of $3,000.
B) $100,000 with a Discount on Bond Investment of $2,925.
C) $96,925.
D) $97,000.
E) $97,075.