On December 31, 2010, Lakeview, Inc., issued $115,000 worth of 4% bonds at 106. The interest on these bonds is paid annually on December 31. 1. What are the interest payments for the first two years? 2. Was the market interest rate higher or lower than 4% at the date of issue? 3. Will the interest expense be higher or lower than the interest payment? 1. What are the interest payments for the first two years? Select the formula and calculate the annual interest payment that will be made on December 31, 2011, and December 31, 2012, for the first two years. x Time = Annual interest payment 2. Was the market interest rate higher or lower than 4% at the date of issue? The market interest rate was v than 4% at the date of issue. 3. Will the interest expense be higher or lower than the interest payment? The interest expense will be than the interest payment