On December 31 2010 Carl s Cartons Inc issued 100 000 worth
On December 31, 2010, Carl’s Cartons, Inc., issued $100,000 worth of 9% bonds at 104. The interest on these bonds is 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 9% at the date of issue?
3. Will the interest expense be higher or lower than the interest payment?

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