On January 1, Year 1, Narduzzi Company issued 20 year 6% coupon bonds with a par value of $100,000. The market rate of interest on the date of issuance was 4%. Interest is payable semi annually on June 30 and December 31.

1. What is the N for the present value calculation?

2. What is the i for the present value calculation?

3. What is the amount of cash interest paid to the bondholders every six months?

4. What is the issue price of the bonds?

5. Calculate total interest expense over the life of the bonds.

6. What is the carrying value of the bonds after period 2, at December 31, Year 1.