On January 1, 2011, Tennessee Harvester Corporation issued debenture bonds that pay interest Semi annually on June 30 and December 31. Portions of the bond amortization schedule appear below:

Required
1) What is the face amount of the bonds? (Omit the "$" sign in your response.)
2) What is the initial selling price of the bonds? (Omit the "$" sign in your response.)
3) What is the term to maturity in years?
4) Interest is determined by what approach?
5) What is the stated annual interest rate? (Omit the "%" sign in your response.)
6) What is the effective annual interest rate? (Round your answer to the nearest whole percent.Omit
7) What is the total cash interest paid over the term to maturity? (Omit the "$" sign in your response.)
8) What is the total effective interest expense recorded over the term to maturity? (Omit the "$" sign in yourresponse.)

Transcribed Image Text:

Cash Effective Outstanding Pavment Pavment Interest Increase in Balance Balance 24,800 24,800 24,800 24.800 24.800 24,800 336,334 336,911 337,516 338,152 338,820 339,521 11,534 12,111 12,716 13,352 14,020 14,721 6,726,682 6,738,216 6,750,327 6.763.043 6,776,395 6,790,415 6,805,136 38 39 40 24,800 24,800 24.800 394,944 398,451 402,133 70,144 73,651 77,333 7,969.016 8,042,667 8,120,000