Bond liability face, accounting, principles, liability

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Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise noted.
At the beginning of the year, a company issues a $1,000 face value, semiannual coupon, bond with an 8 percent coupon rate maturing in 10 years. The annual market rate of interest at issuance was 12 percent. The initial liability recorded for this bond is closest to:
A. $771.
B. $774.
C. $1,000.