On June 30, 2013, Gentex issued 5% stated rate bonds with a face amount of $300

million. The bonds mature on June 30, 2033 (20 years). The market rate of interest

for similar bond issues was 4% (2% semiannual rate). Interest is paid semiannually

(2.5%) on June 30 and December 31, beginning on December 31, 2013.

Required:

a. Determine the price of the bonds on June 30, 2013.

b. Calculate the interest expense Gentex reports in 2013 for these bonds.