Answer:
$468,000
Explanation:
Since the bonds will be held to maturity and purchased at a discount, their value will increase as maturity approaches. On December 31, year 5, the bonds should be reported at $468,002 ≈ $468,000
investment balance = $456,200 + $5,620 (difference between interest receivable and interest revenue 2004) +$6,182 (difference between interest receivable and interest revenue 2005) = $468,002
interest receivable 2004 = $500,000 x 8% = $40,000
interest revenue 2004 = $456,200 x 10% = $45,620
difference 2004 = $45,620 - $40,000 = $5,620
interest receivable 2005 = $500,000 x 8% = $40,000
interest revenue 2005 = ($456,200 + $5,620) x 10% = $46,182
difference 2005 = $46,182 - $40,000 = $6,182
