Franklin Corporation Owns 90 Percent of the Outstanding Voting Stock

Franklin Corporation owns 90 percent of the outstanding voting stock of Georgia Company.On January 2,2007,Georgia sold 7 percent bonds payable with a $5,000,000 face value maturing January 2,2027 at a premium of $500,000.On January 1,2009,Franklin acquired 20 percent of these same bonds at 97.66.Both companies use the straight-line method of amortization.What adjustment should be made to Franklin's 2010 beginning Retained Earnings as a result of this bond acquisition?

A) $107,100.
B) $113,400.
C) $119,700.
D) $144,000.
E) $152,000.