Choice "B" is correct. Interest expense is recognized for the entire period from bond issuance (June 1) through the fiscal year end (December 31).
Choice "a" is incorrect. Three months would only be the time period from October 1 (most recent interest payment date) through December 31 (fiscal year end). This amount represents the interest accrual.
Choice "c" is incorrect. Four months would only be the time period from June 1 (issuance date) through October 1 (first interest payment date after issuance).
Choice "d" is incorrect. Six months would only be the time period from June 30 through December 31 and the bond was issued on June 1.