Auerbach Inc. issued 6% bonds on October 1, 2016. The bonds have a maturity date of September 30, 2026 and a face value of $300 million. The bonds pay interest each March 31 and September 30, beginning March 31, 2017. The effective interest rate established by the market was 8%.

Assuming that Auerbach issued the bonds for $259,227,000, what would the company report for its net bond liability balance at December 31, 2016, rounded to the nearest thousand? (Do not round intermediate calculations.)

$254,727,000.

$259,912,000.

$263,727,000.

$299,000,000.