4.

On July 1, 2013, $10.5 million face amount of 7%, 12-year bonds were issued. The bonds pay interest on an annual basis on June 30 each year. The market interest rates were slightly higher than 7% when the bonds were sold.

Required:

a.

How much interest will be paid annually on these bonds?(Enter your answer in whole dollars.)

Annual Interest Payment: $__________________

b.

Were the bonds issued at:

__________premium or __________discount?

c.

Will the annual interest expense on these bonds be more than, equal to, or less than the amount of interest paid each year?
_____Equal to _____Less than _____More than
	Equal to Less than More than