If the beginning balance of the bond (issued at a discount) is $885.30, the cash payment is $50 (coupon rate is 5%, face value of bond is $1,000), and the annual market interest rate for the period is 6%, what is the amount of amortization and the ending balance of the bond?

Select one:

a. Amortization = Interest Expense Payment = ($885.30 * 6%) $50 = $3.12 / Ending Balance = Beginning Balance + Amortization = $885.30 + $3.12 = $888.42

b. Amortization = Interest Expense Payment = ($885.30 * 6%) $50 = $3.12 / Ending Balance = Beginning Balance - Amortization = $885.30 $3.12 = $882.18

c. Amortization = Interest Expense + Payment = ($885.30 * 6%) + $50 = $103.12 / Ending Balance = Beginning Balance - Amortization = $885.30 $103.12 = $782.18

d. Amortization = Interest Expense + Payment = ($885.30 * 6%) + $50 = $103.12 / Ending Balance = Beginning Balance + Amortization = $885.30 + $103.12 = $988.42