Question: 5. Midland Brands issues three-year bonds dated 1 January 2015 with a face value of $5,000,000. The market interest rate on bonds of comparable risk

5. Midland Brands issues three-year bonds dated 1 January 2015 with a face value of

$5,000,000. The market interest rate on bonds of comparable risk and term is 3%.

If the bonds pay 2.5% annually on 31 December, bonds payable when issued are most likely reported as closest to:

A. $4,929,285.

B. $5,000,000.

C. $5,071,401.

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