On January 2,2014,Mahoney Sales Issued $10,000 in Bonds for $10,900

Multiple Choice

On January 2,2014,Mahoney Sales issued $10,000 in bonds for $10,900.They were 5-year bonds with a stated rate of 4%,and pay semiannual interest payments.Mahoney Sales uses the straight-line method to amortize the bond premium.On June 30,2014,when Mahoney makes the first payment to bondholders,how much will they report as interest expense?

A) $110
B) $450
C) $90
D) $290