1. On January 1, Princeton, Inc. issued $2 million of 8% bonds at 93.5% of par, based on an effective rate of 9%. The bonds pay interest on June 30 and December 31. Using the effective interest rate method, Princetons bond liability immediately after the first coupon payment is made is closest to:

	$1,870,000.
	$1,874,150.

$2,000,000.

2. On January 1, Princeton, Inc. issued $2 million of 8% bonds at 93.5% of par, based on an effective rate of 9%. The bonds pay interest on June 30 and December 31. Princetons total interest expense over the 10 year term of the bonds is closest to:

	$1,600,000.
	$1,683,000.

$1,730,000.