Question $25$

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 $($including interest$)$ in the amount of:

$$3,340,063.$

$$3,902,500.$

$$3,780,000.$

$$3,217,563.$

$$3,782,437.$