On January 1, 2016, Tonika Company Issued a Four-Year, $10,000

Multiple Choice

On January 1, 2016, Tonika Company issued a four-year, $10,000, 7% bond. The interest is payable annually each December 31. The issue price was $9,668 based on an 8% effective interest rate. Tonika uses the effective-interest amortization method. The 2017 interest expense is closest to:

A) $779.
B) $796.
C) $677.
D) $700.