The Winslet Company issues a four-year $80,000, 5 percent serial bond on January 1, Year One. Each December 31, starting on December 31, Year One, the company will pay $20,000 plus interest of 5 percent on the unpaid face value for that year. The bond is issued for 90 percent of face value ($72,000) to yield an annual rate of 8 percent. What is the interest expense to be recognized for Year Two ?

$6,221

$4,621

$5,901

$4,301