On January 1, 2014, a corporation issued $402,100 of 10-year, 12% bonds. The interest is payable semi-annually on June 30 and December 31. The issue price was $417,353 based on a 10% effective (market) interest rate. Assuming the effective-interest method of amortization is used, what is the book value of the bond liability as of June 30, 2014 (to the nearest dollar)?

$414,095.

$420,611.

$405,358.

$402,100.