On January 1, 2016, a company issued $401,200 of 10-year, 12% bonds. The interest is payable semi-annually on June 30 and December 31. The issue price was $415,553 based on a 10% market interest rate. The effective-interest method of amortization is used. What is the book value of the bond liability as of June 30, 2016 (to the nearest dollar)?

$412,259.

$401,200.

$404,494.

$418,847.