Oriole Company purchased $1050000 of 11% bonds of Scott Company on January 1, 2021, paying $978375. The bonds mature January 1, 2031; interest is payable each July 1 and January 1. The discount of $71625 provides an effective yield of 12%. Oriole Company uses the effective-interest method and plans to hold these bonds to maturity.

On July 1, 2021, Oriole Company should increase its Debt Investments account for the Scott Company bonds by

a. $1905.

b. $953.

c. $3581.

d. $7163.