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Discount-Mart issues $10 million in bonds on January 1, 2021. The bonds have a eight-year term and pay interest semiannually on June 30 and December
Discount-Mart issues $10 million in bonds on January 1, 2021. The bonds have a eight-year term and pay interest semiannually on June 30 and December 31 each year. Below is a partial bond amortization schedule for the bonds: Cash Paid Interest Expense Increase in Carrying Value Date 01/01/2021 06/30/2021 12/31/2021 06/30/2022 12/31/2022 $500,000 500,000 500,000 500,000 $539,365 541, 727 544,230 546,884 $39,365 41,727 44,230 46,884 Carrying Value $8,989, 410 9,028,775 9,070,502 9, 114,732 9,161,616 What is the stated annual rate of interest on the bos? (Hint: Be sure to provide the annual rate rather than the six- month rate.) (Do not round your intermediate cations.)
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