On January 1, Vaughn Manufacturing issued $4900000, 9% bonds for $4595000. The market rate of interest for these bonds is 10%. Interest is payable annually on December 31. Vaughn uses the effective-interest method of amortizing bond discount. At the end of the first year, Vaughn should report unamortized bond discount of $256000. $275500. $259050. $286500.