Kona Co. reported cash paid for interest of $55,000 in its statement of cash flows for the current year. Kona did not capitalize any interest during the current year. The following changes on their balance sheet occurred: accrued interest payable decreased by $13,000 along with a decrease in prepaid interest of $21,500. What amount should Kona report as interest expense in its current year statement of income?

A) $63,500

B) $89,500

C) $68,000

D) $76,500