On January 1, 2012, Beta Company issued 5-year bonds having a face value of $100,000. The bonds pay 7% interest annually and were sold for $94,706 to...

1. On January 1, 2012, Beta Company issued 5-year bonds having a face value of $100,000. The bonds pay 7% interest annually and were sold for $94,706 to yield 8.34% interest. Beta's 2012 income statement should report what amount for interest expense on these bonds? 
2. A.$6,630
3. B.$7,000
4. C.$7,898
5. D.$8,340

Can you help me with this one?