At the very beginning of the financial year (1 July 2018), XYZ Ltd issued 70,000 five-year bonds with a face value of $1,000 and a coupon interest rate of 8 per cent per annum, payable annually in arrears at the end of the financial year. The bonds were well received in the market, and the issue price for each bond was $1,020. Consequently, the market rate was 7.5% at the time the bonds were issued. In your answers, include numbers only. No text, no commas, no signs or symbols etc.

1. What is the annual interest expense recognised by the company for the year ended 30 June 2020 (1 mark)? (ignore any tax implications) $ Answer
2. What is the total amount of coupon payments over the bonds life? (1 mark) (ignore any tax implications) $ Answer