On January 1, 2021, Gulf Company purchased $125,000 of Muscat Company bonds at a discount of $5000. The Anand bonds pay 7% interest but were purchased when the market interest rate was 8% for bonds of similar risk and maturity. The bonds pay interest semiannually on June 30 and December 31 of each year. Gulf Company accounts for the bonds as a held-to-maturity investment, and uses the effective interest method. In Gulf Company's December 31, 2021, journal entry to record the second period of interest, Gulf Company would record a credit to interest revenue of: 

Select one:

• $4817
• $4375
• $4800
• $5000