ABC issues $1,100,000 of 9%, 15-year bonds dated January 1, Year 1, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $950,524 (market rate = 10.855%).

Question 1

What is the carrying value of the bond after the first year?

(round to the nearest dollar)

Question 2

What is the carrying value of the bond after the second year?

(round to the nearest dollar)

Question 3

How much is the total bond value on January 1, Year 1, if the market rate = 12%?

(round to the nearest dollar)

Question 4

How much is the total bond value on January 1, Year 1, if the market rate = 8%?

(round to the nearest dollar)