If a $10,000, 7 percent, 10-year bond was issued at 107 on October 1, how much will accrued interest payable be on December 31 if interest payments are made annually? (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)
A) $107
B) $140
C) $175
D) $210
C) $175
Explanation: interest payable is on the stated amount, adjusted for partial year — amount × rate × time; ex: $10,000 × 7% × 1/4 = $175
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