On January 1, 2021, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below:

Payment Cash

Payment Effective

Interest Increase in

Balance Outstanding

Balance

6,544,432

1 316,000 327,222 11,222 6,555,654

2 316,000 327,783 11,783 6,567,437

3 316,000 328,372 12,372 6,579,809

4 316,000 328,990 12,990 6,592,799

5 316,000 329,640 13,640 6,606,439

6 316,000 330,322 14,322 6,620,761

~ ~ ~ ~ ~

~ ~ ~ ~ ~

~ ~ ~ ~ ~

38 316,000 384,243 68,243 7,753,102

39 316,000 387,655 71,655 7,824,757

40 316,000 391,243 75,243 7,900,000

Required:

1. What is the face amount of the bonds?

2. What is the initial selling price of the bonds?

3. What is the term to maturity in years?

4. Interest is determined by what approach?

5. What is the stated annual interest rate?

6. What is the effective annual interest rate?

7. What is the total cash interest paid over the term to maturity?

8. What is the total effective interest expense recorded over the term to maturity?