On January 1 of Year 1, Congo Express Airways Issued

question 184

Multiple Choice

On January 1 of Year 1, Congo Express Airways issued $3,500,000 of 7% bonds that pay interest semiannually on January 1 and July 1. The bond issue price is $3,197,389 and the market rate of interest for similar bonds is 8%. The bond premium or discount is being amortized at a rate of $10,087 every six months.
-After accruing interest at year end, the company's December 31, Year 1 balance sheet should reflect total liabilities associated with the bond issue in the amount of:

• A) $3,780,000.
• B) $3,782,437.
• C) $3,340,063.
• D) $3,217,563.
• E) $3,902,500.

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