Final answer:
The President should record the note payable and corresponding purchase at the actual purchase value, which is also the present value of the bond or debt instrument on the issuance date. The example provided with a $3,000 bond at 8% also emphasizes that both the borrower and the lender reflect this value on their records.
Step-by-step explanation:
In answering the question how much the President should record the note payable and corresponding purchase on, the correct option is a) Actual purchase value. When a company issues a bond or takes on debt, both the note payable and the corresponding purchase should be recorded on the company's financial statements at the present value of the bond, which is the cash amount actually received by the borrower.
This is demonstrated in the given example, where the calculation shows that the present value of a $3,000 bond issued at an 8% interest rate is precisely $3,000. This is because that is the actual purchase value or fair value that the borrower receives and agrees to repay. Even when considering future cash flows, such as interest payments or repayments of the principal at a later date, the initial recording on the financial statements reflects the present value of the bond, which aligns with the amount the borrower received.