Kid Karate Issued $100,000 of 6%,10-Year Bonds When the Market

Kid Karate issued $100,000 of 6%,10-year bonds when the market rate of interest was 5%.The proceeds from this bond issue were $107,000.Using the effective interest method of amortization,what is the result on interest payments or amortization? Assume interest is paid annually.Refer to the PV table on pages 717 to 720 of the text..

A) Interest payments to bondholders each period will be $5,000.
B) Interest payments to bondholders each period will be $5,350.
C) Amortization of the premium for the first interest period will be $5,000.
D) Amortization of the premium for the first interest period will be $650.