A company issued 5-year, 7% bonds with a par value of $100,000. The market rate when the bonds were issued was 6.5%. The company received $101,137 cash for the bonds. Using the straight-line method, the amount of recorded interest expense for the first semiannual interest period is: A) $3,386.30. B) $3,500.00. C) $3,613,70. D) $6,633.70. E) $7,000.00