On January 1, 20x1, a company issued $400,000 of 10-year, 12% bonds. The interest is payable semi-annually on June 30 and December 31. The issue price was $413,153 based on a 10% market interest rate. The effective-interest method of amortization is used. The book value of the bond liability on June 30, 20x1 is closest to: $400,000 $409,811 $407,432 $413,320