On January 2012, Lower Under Co announced an offer to issue bonds with a $200,000 par value, a 10% annual contract rate with interest payable semi-annually, and with a three-year life to gain some liquidity given the current market conditions. Interest payments are due on April 1 and October 1 of each year. Lower Under agrees to make six payments over the three years of the bond. Bonds are issue on April 1^st2012, maturity date is April 1, 2015 and the market rate on April 1^st 2012 is 8%. Lower Under Co. closes its books annually on December 31 and uses the effective interest method.

Multiple Choice

• $184,531

• $210,481

• $200,000

• None of the other alternatives are correct

• $175,129