A corporation issues $99,000, 8%, 5-year bonds on January 1, for $103,460. Interest is paid semiannually on January 1 and July 1. If the corporation uses the straight-line method of amortization of bond premium, determine the amount of bond interest expense to be recognized on July 1.

Select the correct answer.

$3,514

$4,406

$3,960

$7,920