On December 31 2009 Alejandro Enterprises issued 25 000 worth of
On December 31, 2009, Alejandro Enterprises issued $25,000 worth of 5% bonds at 99. These are 10-year bonds with interest paid annually on December 31.
1. What are the interest payments for the first two years?
2. Was the market interest rate higher or lower than 5% at the date of issue?
3. Will the interest expense be higher or lower than the interest payment?

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