A company issued 9%, 5-year bonds with a par value of $145,000. The market rate when the bonds were issued was 10%. The company received $139,400 cash for the bonds. Using the effective interest method, the amount of interest expense for the first semiannual interest period is:

Multiple Choice

$6,525.00.

$13,050.00.

$6,970.00.

$13,940.00.

$7,250.00.