Victor Company issued bonds with a $250,000 face value and a 6% stated rate of interest on January 1, Year 1. The bonds carried a 5-year term and sold for 95. Victor uses the straight-line method of amortization. Interest is payable on December 31 of each year.

The amount of interest expense appearing on the December 31, Year 3 income statement would be:

Multiple Choice

$17,500.

$12,500.

$14,250.

$15,000.