On June 30, 2013, Singleton Computers issued 6% stated rate bonds with a face amount of $200 million. The bonds mature on June 30, 2028 (15 years). The market rate of interest for similar bond issues was 5% (2.5% semiannual rate). Interest is paid semiannually (3%) on June 30 and December 31, beginning on December 31, 2013.
Required:
1. Determine the price of the bonds on June 30, 2013.
2. Calculate the interest expense Singleton reports in 2013 for these bonds.