Assume Kelly Corporation uses the effective interest rate method for amortizing bond premiums and discounts. Kelly Corporation issued bonds on January 1, 2008. The bonds have a face value of $795000 and mature in 15 years. The stated interest rate is 8%. The market rate at date of issue was 6%. The bond pays interest annually on December 31. How much interest will the bond pay on December 31, 2008? What was the issue price of the bond? (Please round to the nearest dollar)

2.

Assume Carrie Corporation uses the effective interest rate method for amortizing bond premiums and discounts. Carrie Corporation issued bonds on January 1, 2008 for $718486. The bonds have a face value of $608000 and mature in 15 years. The stated interest rate is 9%. The bond pays interest annually on December 31. The market rate of interest at January 1, 2008 was 7%. 1. What is the carrying value of the bonds immediately after issue? 2. What is the carrying value of the bonds on January 1, 2009? 3. What is the carrying value of the bonds at maturity?