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On January 1 of Year 1, Congo Express Airways issued $3,400,000 of 7% bonds that pay...

On January 1 of Year 1, Congo Express Airways issued $3,400,000 of 7% bonds that pay interest semiannually on January 1 and July 1. The bond issue price is $3,100,000 and the market rate of interest for similar bonds is 8%. The bond premium or discount is being amortized at a rate of $10,000 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:

Multiple Choice

  • $3,680,000.

  • $3,799,000.

  • $3,001,000.

  • $3,239,000.

  • $3,120,000.

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