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On January 1 of Year 1, Congo Express Airways issued $2,700,000 of 7% bonds that pay interest semiannually on January 1 and July 1. The
On January 1 of Year 1, Congo Express Airways issued $2,700,000 of 7% bonds that pay interest semiannually on January 1 and July 1. The bond issue price is $2,470,000 and the market rate of interest for similar bonds is 8%. The bond premium or discount is being amortized at a rate of $7,667 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. $2,390,834 b. $2,579,834 c. $3,009,166 d. $2,914,666 e. $2,485,334
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