On January 1, 20013, Topo Co. issued $1,000,000 in bonds payable . The bonds pay 4% interest semi-annually on July 1 and January 1, and they mature in 10 years. At the date of issue, Topo received $875,378, which implies a 5% semi-annual effective interest rate. What is the total amount of interest expense for 2013 (the answer is within $100 of)?

a. $70,030

b. $80,000

c. $87,538

d. $87,726

e. None of the above within