Accounting for Bonds Sold at a Discount

The Peoples National Bank raised capital through the sale of $$60$ million face value of four percent coupon rate, ten$-$year bonds. The bonds paid interest semiannually and were sold at a time when equivalent risk$-$rated bonds carried a yield rate of six percent.

Round all answers to the nearest whole number.

a$.$ Calculate the proceeds that The Peoples National Bank received from the sale of the six percent bonds.

$Answer

$51,073,524$

b$.$ Calculate the interest expense on the bonds for the first year that the bonds are outstanding.

$Answer

$0$