1. Mirto Company issues $125,000 of bonds at face value on January 1. The bonds carry a 6% annual stated rate of interest. Interest is payable in cash on December 31 of each year. Which of the following shows the effect of the first interest payment on the elements of the financial statements?

   	Assets	=	Liab.	+	Stk. Equity	Revenue		Expense	=	Net Inc.	Stmt. of Cash Flows
   A.	(7,500)	=	(7,500)	+	NA	NA		NA	=	NA	(7,500)FA
   B.	(7,500)	=	NA	+	(7,500)	NA		7,500	=	(7,500)	(7,500)FA
   C.	(7,500)	=	(7,500)	+	NA	NA		NA	=	NA	(7,500)OA
   D.	(7,500)	=	NA	+	(7,500)	NA		7,500	=	(7,500)	(7,500)OA

   	A.	Option A
   	B.	Option B
   	C.	Option C
   	D.	Option D