Simon Company issued a $100,000 face value bond on January 1, 2014. The bond was issued at 95 and carried a 5-year term to maturity. It had a 7% stated interest rate that was payable in cash on December 31st of each year. Assume that Simon uses the straight-line method for amortizing bond premiums and discounts.

The amount of interest expense on Simon's 2015 income staement would be:

A: $6,000

B: $7,000

C: $8,000

D: $9,000

E: None of the above

The carrying value of the bonds payable on Simon's December 31, 2016 balance sheet would be:

A: $95,000

B: $96,000

C: $97,000

D: $98,000

E: $100,000