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Discount-Mart issues $13 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 $13 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 $520,000 520,000 520,000 520,000 $579,555 582,532 585,659 588,942 $59,555 62,532 65,659 68,942 Carrying Value $11,591,090 11,650,645 11,713, 177 11,778,836 11,847,778 What is the market annual rate of interest on the bonds? (Hint: Be sure to provide the annual rate rather than the six- month rate.) (Do not round your intermediate calculations.)
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