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: Cash Payment Effective Interest Increase in Balance Payment 340,000 340,000 340,000 340,000 340,000 340,000 HNM 2 2 2 352,074 352,678 353, 311 353,977 354,676 355,410 12,074 12,678 13,311 13,977 14,676 15,410 Outstanding Balance 7,641,478 7,053,552 7,066,230 7,079,541 7,093,518 7,108,194 7,123, 604 4 6 N N Nu Nu N N 38 39 40 340,000 340,000 340,000 413,426 417,098 420,952 73,426 77,098 80,952 8,341,950 8,419,048 8,500,000 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? 2 1. 2. 3. years 4. Face amount Initial selling price Term to maturity Interest is determined by what approach? Annual interest rate Effective annual interest rate Total cash interest paid Effective interest expense 5. % 6. % 7. 8