Exercise $7\mathrm{.}20$

LO $7-8$

Bonds payable$-$various issues Atom Endeavour Co$.$ issued $$190$ million face amount of $6\mathrm{.}5\%$ bonds when market interest

rates were $6\mathrm{.}71\%$ for bonds of similar risk and other characteristics.

Required:

a$.$ How much interest will be paid annually on these bonds?

b$.$ Were the bonds issued at a premium or discount? Explain your answer.

c$.$ Will the annual interest expense on these bonds be more than, equal to$,$ or less than the amount of interest paid each

year? Explain your answer.