Question: On January 1, 2019, Bates Inc. issued $8,000,000, 6%, 10-year bonds which pay interest semi-annually on June 30 and December 31. At the time the

On January 1, 2019, Bates Inc. issued $8,000,000, 6%, 10-year bonds which pay interest semi-annually on June 30 and December 31. At the time the bonds were issued, the market rate was 5%.

1. Calculate the amount of cash received by Bates Inc. from the bond issuance.

2. Using the effective interest method, calculate the amount of Bond Interest Expense reported by Bates Inc. for 2019. Round to the nearest dollar.

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