• 2. On July 1, Shady Creek Resort borrowed $370,000 cash by signing a 10-year, 9.5% installment note requiring equal payments each June 30 of $58,928. What amount of interest expense will be included in the first annual payment?

• Multiple Choice

• $346,222

• $23,778

• $37,000

• $58,928

• $35,150

• 3. On January 1 of Year 1, Congo Express Airways issued $4,400,000 of 7%, bonds that pay interest semiannually on January 1 and July 1. The bond issue price is $3,994,000 and the market rate of interest for similar bonds is 8%. The bond premium or discount is being amortized using the straight-line method at a rate of $14,500 every 6 months. The life of these bonds is:

  Multiple Choice

• 28 years.

• 9 years.

• 30 years.

• 27 years

• 14 years.