On January 1, Tyler Inc. issued $5,000,000, 12% bonds for $5,325,000. The market rate of interest for these bonds is 10%. Interest is payable annually on December 31. Tyler uses the effective-interest method of amortizing bond premium. At the end of the first year, Tyler should report unamortized bond premium of:

$308,550.

$257,500.

$275,000.

$307,500.

$265,000.