1. On July 1, 2016, Garden Works, Inc. issued $302,200 of ten-year, 7% bonds for $307,350. The bonds were dated July 1, 2016, and semi-annual interest will be paid each December 31 and June 30. Garden Works Inc. uses the straight-line method of amortization. What is the amount of the semi-annual interest expense? (Do not round intermediate calculations.)

A) $14,154.

B) $10,320.

C) $14,412.

D) $11,077.

2. On July 1, 2016, Garden Works, Inc. issued $300,100 of ten-year, 7% bonds for $303,500. The bonds were dated July 1, 2016, and semi-annual interest will be paid each December 31 and June 30. Garden Works Inc. uses the straight-line method of amortization. What is the net amount of the bond liability to be reported on the December 31, 2016 balance sheet?

A) $303,330.

B) $303,500.

C) $303,160.

D) $300,100.