Discount-Mart issues $15 million in bonds on January 1, 2024. The bonds have a seven-year term...
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Discount-Mart issues $15 million in bonds on January 1, 2024. The bonds have a seven-year term and pay interest semiannually on June 30 and December 31 each year. Below is a partial bond amortization schedule for the bonds: Date 01/01/2024 Cash Paid Interest Expense Increase in Carrying Value Carrying Value $13,605,752 06/30/2024 $750,000 $816,345 $66,345 13,672,097 12/31/2024 750,000 820,326 70,326 13,742,423 06/30/2025 750,000 824,545 74,545 13,816,968 12/31/2025 750,000 829,018 79,018 13,895,986 What is the stated annual rate of interest on the bonds? (Hint: Be sure to provide the annual rate rather than the six-month rate.) (Do not round your intermediate calculations.) Multiple Choice 5% 11% 12% 10% Discount-Mart issues $15 million in bonds on January 1, 2024. The bonds have a seven-year term and pay interest semiannually on June 30 and December 31 each year. Below is a partial bond amortization schedule for the bonds: Date 01/01/2024 Cash Paid Interest Expense Increase in Carrying Value Carrying Value $13,605,752 06/30/2024 $750,000 $816,345 $66,345 13,672,097 12/31/2024 750,000 820,326 70,326 13,742,423 06/30/2025 750,000 824,545 74,545 13,816,968 12/31/2025 750,000 829,018 79,018 13,895,986 What is the stated annual rate of interest on the bonds? (Hint: Be sure to provide the annual rate rather than the six-month rate.) (Do not round your intermediate calculations.) Multiple Choice 5% 11% 12% 10%
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