On January 1, a Company Issues Bonds Dated January 1

Multiple Choice

On January 1, a company issues bonds dated January 1 with a par value of $200,000. The bonds mature in 3 years. The contract rate is 4%, and interest is paid semiannually on June 30 and December 31. The market rate is 5%. Using the present value factors below, the issue (selling) price of the bonds is: n= i=
Present Value of an
Annuity Present value of $1
3 4) 0 % 2.7751 0.8890
6 2) 0 % 5.6014 0.8880
3 5) 0 % 2.7232 0.8638
6 2) 5 % 5.5081 0.8623

A) $172,460.
B) $194,492.
C) $22,032.
D) $205,607.
E) $200,000.