14.8.a

On January 1, 2018, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below:

Payment	Cash Payment	Effective interest	Increase in balance	Outstanding Balance
				6,015,542
1	225,000	240,622	15,622	6,031,164
2	225,000	241,247	16,247	6,047,411
3	225,000	241,896	16,896	6,064,307
4	225,000	242,572	17,572	6,081,879
5	225,000	243,275	18,275	6,100,154
6	225,000	244,006	19,006	6,119.160
-	-	-	-	-
-	-	-	-	-
-	-	-	-	-
38	225,000	291,675	66,675	7,358,543
39	225,000	294,342	69,342	7,427,885
40	225,000	297,115	72,115	7,500,000

Required:

1. What is the face amount of the bonds?
2. What is the initial selling price of the bonds?
3. What is the term to maturity in years?
4. Interest is determined by what approach?
5. What is the stated annual interest rate?
6. What is the effective annual interest rate?
7. What is the total cash interest paid over the term to maturity?
8. What is the total effective interest expense recorded over the term to maturity?

1.	Face amount
2	Initial selling price
3	Term to maturity		years
4	Interest is determined by what approach?
5	Annual interest rate		%
6	Effective annual interest rate		%
7	Total cash interest paid
8	Effective interest expense