On January 1, 2005, Benson Co. issued $1,000,000 in bonds payable, due in seven years. The bonds pay 4% interest annually on each December 31. At the date of issue, Benson received $838,321, which implies a 7% effective interest rate. Konerko Corp. purchased Benson’s entire bond issue at January 1, 2005, and intends to hold the bond to its maturity date.

Q - How much interest expense will Benson show on its income statement for the year ended December 31, 2005?