Hogwarts School of Witchcraft and Wizardry is building an addition to its castle, funded through a bond issuance. Specific information about the bond is provided below.

Albus Dumbledore, the school's headmaster, would like some assistance in relation to bond issuance and asks that you provide the following:

$(1)$ An amortization schedule for the three different pontential stated rates of the bond

$(3)$ Your recommendation of which stated rate they should use when issuing the bonds and WHY. Any additional insights you have would be greatly appreciated.Dumbledore has decided to issue a $10-$year, $$1,000,000$ bond with interest paid semiannually.

The market rate $($yield$)$ for bonds of similar risk and maturity is $6\%.$

Dumbledore is considering a stated $($coupon$)$ rate of $4\%,6\%,$ or $8\%.$

Complete the Bond Amortization Schedules for each of the three potential stated rates.

Also indicate whether the bond would be issued at a premium, discount or face amount.Bond Amorization Schedule with Stated Rate of $7\%$ Bond Amorization Schedule with Stated Rate of $9\%$ Bond Amorization Schedule with Stated Rate of $11\%$

Payment Cash Interest Payment Interest Expense Amortization Balance

$($Carrying Value$)$ Payment Cash Interest Payment Interest Expense Amortization Balance

$($Carrying Value$)$ Payment Cash Interest Payment Interest Expense Amortization Balance

$($Carrying Value$)$

Beg. Balance Beg. Balance Beg. Balance

$111$

$222$

$333$

$444$

$555$

$666$

$777$

$888$

$999$

$101010$

$111111$

$121212$

$131313$

$141414$

$151515$

$161616$

$171717$

$181818$

$191919$

$202020$

This bond would be issued at This bond would be issued at This bond would be issued at