Merthant Company issued 10 -year bonds on January 1 . The 5% bonds have a face value of $791,000 and pay interest every January 1 and July 1. The bonds were sold for $657,408 based on the market interest rate of 6%. Merchant uses the effective interest rate method to amortize bond discounts and premiums: On July 1 of the first year, Merchant should record interest expense (rounded to the nearest dollar) of 2. 516,435 b. 527,730 c. 519,722 d. $19,775