A corporation issues $26,000,000 of 9% bonds to yield interest at the rate of 7%.
(a) Was the amount of cash received from the sale of the bonds greater or less than $26,000,000?
(b) Identify the following amounts as they relate to the bond issue:
(1) Face amount,
(2) Market or effective rate of interest,
(3) Contract rate of interest,
(4) Maturity amount.