Hermosa Vista Company Issued $200,000 5-Year,7% Bonds and Received $202,274

Hermosa Vista Company issued $200,000 5-year,7% bonds and received $202,274 in cash.The market rate of interest when the bonds were issued was 6.5%.What is the amount of interest expense to be recorded for the first annual interest period if the company uses simplified effective-interest amortization?

A) $13,147.81
B) $14,000.00
C) $13,000.00
D) $14,159.18