ANSWER ONLY

Seraphine Corporation

Seraphine Corporation decided to acquire bond investments during year 2020. On January 1, 2020, Seraphine acquired bonds issued by AHRI Company with a face amount of 9,000,000 with an acquisition price of 9,270,000 (inclusive of 270,000 transaction costs). The bonds were issued on January 1, 2020 and is expected to be repaid on a semi-annual basis with repayment dates of every June 30 and December 31 of each year. The last repayment is expected to be on December 31, 2022. The bonds carry 8% interest to be paid on a quarterly basis every March 31, June 30, September 30, and December 31 and is computed based on the outstanding balance of the bond before the corresponding repayment on applicable repayment dates.

Seraphine decided to compute for the effective yield rate of the bond investment based on the acquisition price (which is equal to the present value of future cash flows of the bonds) and based on the cash flow profile of the bonds.Seraphine used the "goal seek" function in excel to compute and interpolate the exact effective yield rate of the bonds. Seraphinedecided not to round offany computed effective yield rate and any PV factors used in the calculation of present value at day 1.

Based on the Company's assessment, the bonds are intended to have a"hold to collect"business model and evidently, itpassed the contractual cash flows test.Seraphine also intendednot to irrevocably designatesuch bonds at fair value through profit or loss.

Question 1:Based on the Company's assessment, the effective yield rate computed by Seraphine is ___%?(Just for this question kindly round off to 4 decimal places, computed by goal seek function in excel. For the rest of the calculation, do not round off.)

Question 2:How much is the ending balance of investment in bonds of Seraphine as ofDecember 31, 2020? (Round off your answer to nearest whole number).

Question 3:How much is the ending balance of investment in bonds of Seraphine as ofDecember 31, 2021? (Round off your answer to nearest whole number).

Question 4:How much is the interestreceivedby Seraphine as ofDecember 31, 2020? (Round off your answer to nearest whole number).

Question 5:How much is the interest income of Seraphine arising from the bonds as ofDecember 31, 2020? (Round off your answer to nearest whole number).