Cramer Company sold 5-year, 8% bonds on November 1, 2011. The face amount of the bonds was $500,000. Interest is payable on April 30th and November 30th of each year. The bonds were sold to yield 7%. The fiscal year of Cramer Company ends on December 31. How much interest expense will Cramer Company report in its December 31, 2011, income statement (assume effective interest amortization)?
A. $6,076.
B. $6,667.
C. $18,228.
D. $20,000.