On January 1, 2021, Waterway Industries sold $5,000,000 of its 10%, 10 year bonds for $4,426,504 to yield 12%. Interest is payable semiannually on January 1 and July 1. What amount should Waterway report as interest expense for the six months ended June 30, 2021?

a) $250,000

b) $258,568

c) $517,136

d) $265,590