Problem
On January 1, 2016, the Washington Group issued $100,000 par value 5%, five-year bonds when the market rate of interest was 8%. Interest is payable annually on December 31. The following present value information is available:
5% 8%
|
5%
|
8%
|
|
Present value of $1 (n = 5)
|
0.78353
|
0.68058
|
|
Present value of an ordinary annuity (n = 5)
|
4.32948
|
3.99271
|
What amount is the value of the net bonds payable at the end of 2016?