On January 1 , 20X1 , Hillsborough Inc. sold 12% bonds with a face value of $500,000. The bonds mature in five years, and interest is paid semiannually on June 30 and December 31. The bonds were sold for $538,500 to yield 10%. Using the effective interest method of amortization, interest expense for 20X1 is: (a) $50,000. (b) $53,696. (c) $60,000. (d) $53,850. 1S