On January 1, 2012 Subsidary issues 5-year bonds with a face amount of $1,000,000 paying cash interest of 8 percent annually. The market rate of interest on January 1, 2012 is 9 percent. With the help of the tables below, determine what amount of premium or discount Subsidiary will realize and recognize upon issuance of these bonds on January 1, 2012, if issued to yield an effective interest rate of 9%?

Present Value of $1
N/R	1%	2%	3%	4%	5%	6%	7%	8%	9%	10%	11%	12%
1	0.9901	0.9804	0.9709	0.9615	0.9524	0.9434	0.9346	0.9259	0.9174	0.9091	0.9009	0.8929
2	0.9803	0.9612	0.9426	0.9246	0.907	0.89	0.8734	0.8573	0.8417	0.8264	0.8116	0.7972
3	0.9706	0.9423	0.9151	0.889	0.8638	0.8396	0.8163	0.7938	0.7722	0.7513	0.7312	0.7118
4	0.961	0.9238	0.8885	0.8548	0.8227	0.7921	0.7629	0.735	0.7084	0.683	0.6587	0.6355
5	0.9515	0.9057	0.8626	0.8219	0.7835	0.7473	0.713	0.6806	0.6499	0.6209	0.5935	0.5674
Present Value of an Ordinary Annuity of $1
N/R	1%	2%	3%	4%	5%	6%	7%	8%	9%	10%	11%	12%
1	0.9901	0.9804	0.9709	0.9615	0.9524	0.9434	0.9346	0.9259	0.9174	0.9091	0.9009	0.8929
2	1.9704	1.9416	1.9135	1.8861	1.8594	1.8334	1.808	1.7833	1.7591	1.7355	1.7125	1.6901
3	2.941	2.8839	2.8286	2.7751	2.7232	2.673	2.6243	2.5771	2.5313	2.4869	2.4437	2.4018
4	3.902	3.8077	3.7171	3.6299	3.546	3.4651	3.3872	3.3121	3.2397	3.1699	3.1024	3.0373
5	4.8534	4.7135	4.5797	4.4518	4.3295	4.2124	4.1002	3.9927	3.8897	3.7908	3.6959	3.6048

$241,479 premium

$38,924 premium

$38,924 discount

$81,573 discount

$81,573 premium

$57,603 premium

None of the other choices are correct.

$241,479 discount

$57,603 discount