A company issued five-year, 7% bonds with a par value of $250,000. The market rate when the bonds were issued was 6.5%. The company received $284,250 cash for the bonds. Using the straight-line method, the amount of recorded interest expense for the first semiannual interest period is:

A) $19,897.50

B) $5,325.00

C) $17,500.00

D) $9,948.75

E) $8,750.00