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On January 1, 2016, Solo Inc. Issued 1,400 of its 9%, $1,000 bonds at 98. Interest is payable semiannually on January 1 and July 1.

On January 1, 2016, Solo Inc. Issued 1,400 of its 9%, $1,000 bonds at 98. Interest is payable semiannually on January 1 and July 1. The bonds mature on January 1, 2026. Solo paid $54,000 in bond issue costs. Solo uses straight-line amoritization. The amount of the interest expense for the year is:

1.) $128,800

2.) $134,200

3.) $126,000

4.) $137,000

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