Question: On December 31 2012 Advanced Defense Contractors issued 25 000 face

On December 31, 2012, Advanced Defense Contractors issued $25,000 face value of 10% bonds at 95. They were five-year bonds with interest paid semiannually, on June 30 and December 31.
1. What are the interest payments for the first two years?
2. Was the market interest rate higher or lower than 10% at the date of issue?
3. Will the interest expense be higher or lower than the interest payment?



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  • CreatedSeptember 01, 2014
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