On January 1, 2018, Frontier World issues $40.2 million of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year. The proceeds will be used to build a new ride that combines a roller coaster, a water ride, a dark tunnel, and the great smell of outdoor barbeque, all in one ride.

Required: 1-a. If the market rate is 6%, calculate the issue price. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Do not round interest rate factors. Enter your answers in dollars not in millions. Round "Market interest rate" to 1 decimal place.)

1-b. The bonds will issue at a premium, face amount, or discount?

Bond Characteristics Amount $ 40,200,000 $ 1,407,000 Face amount Interest payment Market interest rate Periods to maturity Issue price 20