On November 1, year 1, Dixon Corporation issued $ 800,000 of its 10- year, 8% term bonds dated October 1, year 1. The bonds were sold to yield 10%, with total proceeds of $ 700,000 plus accrued interest. Interest is paid every April 1 and October 1. What amount should Dixon report for interest payable in its December 31, Year 1 balance sheet?
a. $ 17,500
b. $ 16,000
c. $ 11,667
d. $ 10,667