A company issued 7%, 5-year bonds with a par value of $65,000. The market rate when the bonds were issued was 8%. The company received $62,366 cash for the bonds. Using the effective interest method, the amount of interest expense for the first semiannual interest period is:

Multiple Choice

• $4,550.00.

• $4,989.28.

• $2,600.00.

• $2,275.00.

• $2,494.64.