On January 1, Nicholas Corporation issued \(\$ 1,000,000\), 14%, 5 -year bonds with interest payable on December 31 . The bonds sold for \(\$ 1,072,096\). The market rate of interest for these bonds was \(12 \%\). On the first interest date, using the effective-interest method, the debit entry to Interest Expense is for:

a. \(\$ 120,000\).

b. \(\$ 125,581\).

c. \(\$ 128,652\).

d. \(\$ 140,000\).