If a ($ 400,000,8 %) mandatorily convertible bond is issued at par and ($ 76,400) of the

Question:

If a $\$ 400,000,8 \%$ mandatorily convertible bond is issued at par and $\$ 76,400$ of the issuance price is attributable to the interest obligation, how much interest expense will be recorded in the first year? The effective yield is $8 \%$. How much is paid to the investor each year?

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