Question

On January 1, Year 1, Boston Group issued $100,000 par value, 5% 5-year bonds when the market rate of interest was 8%. Interest is payable annually on December 31. The following present value information is available:
5%, 8%
Present value of $1 (n = 5) 0.78353, 0.68058
Present value of an ordinary annuity (n = 5) 4.32948, 3.99271

What amount is the value of net bonds payable at the end of Year 1?

A. $110,638
B. $100,000
C. $88,022
D. $90,064

Answer 1

Would have to say the answer is B