On January 1 of Year 1, Congo Express Airways issued $3,650,000 of 8% bonds that pay interest semiannually on January 1 and July 1. The bond issue price is $3,350,000 and the market rate of interest for similar bonds is 9%. The bond premium or discount is being amortized at a rate of $10,000 every six months. The amount of interest expense recognized by Congo Express Airways on the bond issue in Year 1 would be:

A: $292,000

B: $312,000

C: $328,500

D: $156,000

E: $272,000