On January 1 of Year 1, Congo Express Airways issued $3,700,000 of 6% bonds that pay interest semiannually on January 1 and July 1. The bond issue price is $3,360,000 and the market rate of interest for similar bonds is 7%. The bond premium or discount is being amortized at a rate of $11,333 every six months. The amount of interest expense recognized by Congo Express Airways on the bond issue in Year 1 would be:

Multiple Choice

• $199,334.

• $244,666.

• $259,000.

• $222,000.

• $122,333.