Smith Corp. issued $400,000 of 5-year, 7% bonds at 104.265 with a market interest rate of 6%. The bonds were sold on their issue date, March 1, 2019. Interest is payable on March 1 and September 1. What is the amount of the effective interest expense on September 1, 2019 when the first interest payment is made? A $12,000 B. $14,000 c. $48,000 OD. $12,512