Lesp Industries issues fi ve-year bonds dated January 1, 2015 with a face value of \($2\),000, 000 and 3% coupon rate paid annually on December 31. Th e market interest rate on bonds of comparable risk and term is 4%. Th e sales proceeds of the bonds are \($1\),910,964.

Under the eff ective interest rate method, the interest expense in 2017 is closest to:

A . \($77\),096.

B . \($77\),780.

C . \($77\),807.