Kalahari Limited On January 2, Year 1, This Company Issued 1,000,000 10-Year

Kalahari Limited
On January 2, Year 1, this company issued 1,000,000 10-year bonds for $1,150,000. The bonds pay interest on June 30 and December 31. The stated rate is 10% and the market rate is 8%. The company plans to use the effective interest method for amortizing bond discounts and premiums. Refer to the PV table on pages 717 to 720 of the text.
-Refer to the figure Kalahari Limited.What is the interest expense on the bonds at June 30,Year 1?

A) $40,000
B) $42,000
C) $46,000
D) $50,000