Discount-Mart issued ten thousand $1,000 bonds on January 1, 2011. They have a ten-year term and pay interest semiannually. This is the partial bond amortization schedule for the bonds.

Payment	Cash	Effective Interest	Decrease in Balance	Outstanding Balance
				$8,640,967
1	300,000	345,639	345,639	8,686,606
2	300,000	347,464	347,464	8,734,070
3	300,000	349,363	349,363	8,783,433
4	300,000

What is the interest expense on the bonds in 2012?

A. $351,337

B. $600,000

C. $700,700

D. $100,700