On January 1, Campanella Inc. issued $4,000,000, 8% bonds for $3,756,000. The market rate of interest for these bonds is 10%. Interest is payable annually on December 31. Campanella uses the effective-interest method of amortizing bond discount. At the end of the first year, Campanella should report unamortized bond discount of:

$219,600.

$228,400.

$206,440.

$188,400

$106,000.