Designer Company issued 10-year bonds on January 1. The 10% bonds have a face value of $105,000 and pay interest every January 1 and July 1. The bonds were sold for $126,642 based on the market interest rate of 8%. Designer uses the effective interest method to amortize bond discounts and premiums. On July 1 of the first year, Designer should record an interest expense (round to the nearest dollar) of

a. $5,250 b. $6,332 c. $5,066 d. $4,200