On Jan 1, 2014 Gravel Company lent $17,800 cash to Paver Company. The promissory note made by Paver for $20,000 did not bear explicit interest and was due in Dec 31,2016. No other rights or privileges were exchanged. The prevailing interest rate for a loan of this type is six percent. Assume that the present value of $1 for two periods at six percent is .89, Paver should recognize interest expense in 2014 of

A) 0

B) $1,068

C) $1,100

D) $1,200