Sun City issues $45 million of bonds on January 1, 2021 that pay interest semiannually on June 30 and December 31. A portion of the bond amortization schedule appears below:

	Cash	Interest	Decrease in	Carrying
Date	Paid	Expense	Carrying Value	Value
01/01/2021				$	48,610,378
06/30/2021	$2,700,000	$2,673,571	$26,429		48,583,949
12/31/2021	2,700,000	2,672,117	27,883		48,556,066

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

multiple choice

Premium

Discount

Face amount

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

3. What is the face amount of the bonds?

4. What is the stated annual interest rate? (Hint: Be sure to provide the annual rate rather than the six-month rate.)

5. What is the market annual interest rate? (Hint: Be sure to provide the annual rate rather than the six-month rate.)

6. What is the total cash paid for interest assuming the bonds mature in 20 years?

Answer rating: 100% (QA)

Premium 2 Original issue price 3 Face amo... View the full answer