Reilly Company issued $1,000,000 of 7%, 10 year bonds on January 1, 2012 at 105. Interest is payable semiannually on July 1st and January 1st of each year. Reilly Company uses the straight-line method of amortization for bond premium or discount. Which of the choices below has the correct amounts for: (1) The cash received by Reilly at bond issuance on January 1, 2012. (2) The interest expense recorded on July 1, 2012. (3) The amortized premium on December 31, 2012. (1) Cash received at bond issuance on January 1, 2012 is $1,000,000. (2) Interest expensed on July 1, 2012 is $50,000. (3) Amortized premium on bonds payable on December 31, 2012 is $5,000. (1) Cash received at bond issuance on January 1, 2012 is $1,050,000. (2) Interest expensed on July 1, 2012 is $50,000. (3) Amortized premium on bonds payable on December 31, 2012 is $2,500. (1) Cash received at bond issuance on January 1, 2012 is $1,070,000. (2) Interest expensed on July 1, 2012 is $35,000. (3) Amortized premium on bonds payable on December 31, 2012 is $3,500. (1) Cash received at bond issuance on January 1, 2012 is $1,050,000. (2) Interest expensed on July 1, 2012 is $32,500. (3) Amortized premium on bonds payable on December 31, 2012 is $2,500.