On January 1, 2021, Vacation Destinations issues $26 million in bonds that pay interest semi-annually on June 30 and December 31. Below are parts of the bond amortization schedule:

	(1)			(2)				(3)			(4)						(5)
			paid in cash					Interest			It increased in						That carries
	Date		out of interest					Bills			Value in books						Valor
	1/1/2021																ps	24.152.388
	30/06/2021			ps	780.000			ps	845,334			ps	65,334					24,217,722
	31/12/2021				780.000				847,620				67,620					24,285,342

Required:
1. Were the bonds issued at face value, at a discount, or at a premium?

2. What is the original issue price of the bonds? 

3. What is the face value of the bonds? 

4. What is the established annual interest rate?

5. What is the market annual interest rate?

6. What is the total cash paid in interest assuming the bonds mature in 10 years?

Answer rating: 100% (QA)

Solution 1 The Bonds were issued at a discount Solut... View the full answer