Question: Assume that the bonds in exercise 1 do not pay periodic interest and that the market rate of return on the date of issue was

Assume that the bonds in exercise 1 do not pay periodic interest and that the market rate of return on the date of issue was 7.50%. 1. At what price were the bonds issued? 2. What is the interest expense for the second year? 3. What is the carrying value of the bonds at the end of the seventh year?

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