In order to accurately assess the capital structure of a firm, it is necessary to convert its balance sheet figures to a market value basis. K Corporation's balance sheet as of today, January 1, 2015, is as follows:

Long-term debt (bonds, at par) $10,000,000
Preferred stock 2,000,000
Common stock ($10 par) 10,000,000
Retained earnings 4,000,000
Total debt and equity $26,000,000

The bonds have a 4 percent coupon rate, payable semiannually, and a par value of $1,000. They mature on January 1, 2025. The yield to maturity is 12 percent, so the bonds now sell below par. What is the current market value of the firm's debt?