Hopkins Company is planning to issue $$460,000$ of $7\%,15-$year bonds payable to borrow for a major expansion. The owner, Franky Hopkins, asks your advice on some related matters.

Read the requirements.

Requirement $1.$ Answer the following questions.

At what type of bond price will Hopkins Company have total interest expense equal to the cash

a$.$ interest payments?

Under which type of bond price will Hopkins Company's total interest expense be greater than the

b$.$ cash interest payments?

If the market interest rate is $9\%,$ what type of bond price can Hopkins Company expect for the

c$.$ bonds?

Requirement $2.$ Compute the price of the bonds if the bonds are issued at $88.$

The price of the $$460,000$ bond issued at $88$ is

Requirement $3.$ How much will Hopkins Company pay in interest each year? How much will Hopkins Company's interest expense be for the first year? $($For this scenario we are assuming that the $$460,000$ bonds are issued at $88.$ Further assume that the straight$-$line method is used.$)$

If the $$460,000$ bonds are issued at $88,$ Hopkins Company will pay this amount of interest each year

$($Round your answers to the nearest whole dollar.$)$

Assuming that the straight$-$line method is used, Hopkins Company's interest expense for the first year will be