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.

On the first semi-annual interest payment date, the amount of premium that MNO Corporation

would amortize by the effective-interest method is:

A. $306

B. $272

C. $228

D. $500

E. Some other amount