Exercise 5-22 (Algo) Price of a bond; interest expense [LO5-9, 5-10]

On June 30, 2024, Single Computers issued 5% stated rate bonds with a face amount of $320 million. The bonds mature on June 30, 2039 (15 years). The market rate of interest for similar bond issues was 4% (2.0% semiannual rate). Interest is paid semiannually (2.5%) on June 30 and December 31, beginning on December 31, 2024.

Note: Use tables, Excel, or a financial calculator. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)

Required:

1. Determine the price of the bonds on June 30, 2024.
2. Calculate the interest expense Single reports in 2024 for these bonds using the effective interest method.