Question
A. Veerkaran's Vehicles issues a $71,000 face value bond with a 3% stated interest rate on October 1st, Year 1. The bond will pay coupons
A. Veerkaran's Vehicles issues a $71,000 face value bond with a 3% stated interest rate on October 1st, Year 1. The bond will pay coupons semi-annually for three years, ending October 1st, Year 4. The market interest rate is 6% when the bond is issued. Using the above information, solve for the cash paid for interest on April 1st, Year 2. Round your answer to the nearest two decimal places.
B. On January 1st, Year 1, Lihi's Limousines issues a $33,000 face value 4% bond with semi-annual payments. The bond will last five years, ending on January 1st, Year 6. The market rate of interest on the date of the bond's issuance is 10%. Using the above information, what interest expense will Lihi's Limousines record on July 1st, Year 1? Round your final answer to the nearest two decimal places.
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