Andrews Inc, issues a \(\$ 497,000,10 \% 3\)-year mortgage note on January 1. The note will be paid in three annual installments of \(\$ 200,000\), each payable at the end of the year. What is the amount of interest expense that should be recognized by Andrews Inc. in the second year?

(a) \(\$ 16,567\).

(c) \(\$ 34,670\).

(b) \(\$ 49,700\).

(d) \(\$ 346,700\).