On August 1, Year 1, Jackson Company issued a one-year $80,000 face value interest-bearing note with a stated interest rate of 9% to Galaxy Bank. Jackson accrues interest expense on December 31, Year 1, its calendar year-end. What is the amount of interest expense and the total cash outflow related to the note during the year ending December 31, Year 2?

Interest Expense. Cash Outflow

A. $3000. $7200 B. $7,200. $80,000 C. $7200. $4,200 D. $4,200. $87,200