Oliver Company Purchased $400,000 of 10% Bonds of McGee Co

Oliver Company purchased $400,000 of 10% bonds of McGee Co. on January 1, 2008, paying $376,100. The bonds mature January 1, 2018; interest is payable each July 1 and January 1. The discount of $23,900 provides an effective yield of 11%. Oliver Company uses the effective-interest method and plans to hold these bonds to maturity.
-For the year ended December 31, 2008, Oliver Company should report interest revenue from the McGee Co. bonds of

A) $42,392.
B) $41,409.
C) $41,368.
D) $40,000.