Cramer Company sold five-year, 10% bonds on October 1. 2016. The face amount of the bonds was $125,000, while the issue price was $132,000. Interest is payable on April 1 of each year. The fiscal year of Cramer Company ends on December 31. How much interest expense will Cramer Company report in its December 31. 2016, income statement (assume straight-line amortization)? (Do not round intermediate calculations.) $2,425. $2,775. $3,300. $3,125