MNO Corporation issued $100,000 face value, 9% (contractual rate), 10-year bonds. Bond interest is paid semi-annually. The market rate of interest on the issue date was 8%, and as a result MNO Corporation received $106,796 in cash for the bonds.

12. On the first semi-annual interest payment date, the holders of these bonds would be paid:

A. $4,500

B. $4,272

C. $4,000

D. $4,806

E. Some other amount