A $100,000 bond payable is issued on June 1, Year One for 106,000. The bond comes due in exactly five years.

The bond pays annual cash interest of12 percent per year with payments every June1 and December1. If the straight-line method is being used, what amount (rounded) should be reported for the liability as of December31, Year One?

 A $104,800  B $105,000    C $105,300  D $105,400