On January $1,$ Year $1$ Residence Company issued bonds with a $$50,000$ face value. The bonds were issued at $96$ resulting in a $4\%$ discount. They had a $20$ year term and a stated rate of interest of $7\%.$ The company amortizes the discount on a straight$-$line basis. Which of the following shows how the recognition of interest expense will affect Residence$$s financial statements on December $31,$ Year $1?$