I NEED SPECIFIC EXPLANATION, THANK YOU!

William and Jackie Colby are filing a joint federal return. They have the following investment income:

Wells Fargo Bank CD, $720 Series HH bond interest, $521 Port of San Francisco, California, bond interest, $375 City of Bend, Oregon, bond interest, $64 Hickory Farms dividends, $826 Kraft, Inc. dividends, $597 Franklin Mutual Fund dividends, $283 Credit Union dividends, $232 Blake Harrison, private contract interest, $1,263

What is the amount of total taxable interest reported on Form 1040, Schedule B?

A. $2,504

B. $2,736

C. $2,801

D. $3,175