Herman Company Received Proceeds of $188,500 on 10-Year, 8% Bonds

Herman Company received proceeds of $188,500 on 10-year, 8% bonds issued on January 1, 2009. The bonds had a face value of $200,000, pay interest semi-annually on June 30 and December 31, and have a call price of 101. Herman uses the straight-line method of amortization.
What is the carrying value of the bonds on January 1, 2011?

A) $200,000
B) $190,800
C) $197,700
D) $189,650