13. Merchant Company issued 10-year bonds on January 1. The 7% bonds have a face value of $741,000 and pay interest every January 1 and July 1. The bonds were sold for $615,853 based on the market interest rate of 8%. Merchant uses the effective interest method to amortize bond discounts and premiums. On July 1 of the first year, Merchant should record interest expense (round to the nearest dollar) of

a. $21,555

b. $29,640

c. $24,634

d. $25,935