Please provide a breakdown of the solutions.

On January 1, Year 1, Worthy Co. issued $1,000,000 of bonds payable. The bonds mature in five years on December 31, Year 5, and pay 9% interest once a year on December 31. The issue sold for $891,857 to yield 12%. Worthy uses the effective interest method. What is the amount of the liability at December 31, Year 2, after the second interest payment?

a. $1,000,000

b. $931,590

c. $927,945

d. $908,8800

On January 1, Year 1, Worthy Co. issued $1,000,000 of bonds payable. The bonds mature in five years on December 31, Year 5, and pay 9% interest once a year on December 31. The issue sold for $891,857 to yield 12%. Worthy uses the effective interest method. Year 3 interest expense is:

a. $120,000.

b. $270,000.

c. $111,353.

d. $90,000.