7. (TCO D) On November 1, Year 1, Dixon Corporation issued $700,000 of its 10-year, 10% term bonds dated October 1, Year 1. The bonds were sold to yield 11%, with total proceeds of $676,655 plus accrued interest. Interest is paid every April 1 and October 1. What amount should Dixon report for interest payable in its December 31, Year 1 balance sheet? (Points : 6)

$17,500

$16,000

$11,667

$10,667