Texxon Corporation issued $500,000 of 8%, 10-year bonds. Interest is paid semiannually. Assume that the market rate for similar investments is 6 percent.

1. These bonds would be issued at a premium (i.e., your answer to #2 should be more than $500,000). What amount of premium will be amortized on the first semi-annual interest payment date?

a. $1,490.80

b. $3,727.00

c. $1,863.50

d. $2,763.80