7. Bjork, Inc. borrowed $150,000 from 1st Star Bank on July 1, 2016. The loan stipulates that the annual interest rate is 8%, payable on the 15th of each month, payments beginning July 15, 2016. Assume Bjork makes all interest payments when they are due. How much will Bjork, Inc. report on its 2016 income statement for interest expense?

a. $500

b. $5,500

c. $12,000

d. $6,000

e. $0