The Merchant Company issued 10-year bonds on January 1. The 8% bonds have a face value of $91,000 and pay interest every January 1 and July 1. The bonds were sold for $109,756 based on the market interest rate of 6%. Merchant uses the effective interest method to amortize bond discounts and premiums. On July 1 of the first year, Merchant should record interest expense (round to the nearest dollar) of O $2,730 O $4,390 O$3,293 O $3,640