On March $31,2023$ FTRN issued $5-$year $8\%$ coupon notes with a face value of $$1$ billion to a syndicate of large investment banks. The terms are as follows:

Face value:

$$1$ billion

Coupon rate:

$8\%,$ paid quarterly

Payments:

Interest only, principal at maturity

Maturity date:

Mar. $31,2028$

Based on a risk assessment that factors in FTRN$\text{'}$s likelihood of default, and a fresh reduction in the federal funds rate, the lending banks ultimately priced the notes to yield a $7\mathrm{.}5\%$ return on their investment.

Required:

a$.$ How much cash will FTRN raise from issuing these notes $($ignore underwriting costs$)?$

b$.$ What is the net liability $($carrying value$)$ recorded on the issuance date?

c$.$ How much cash will FTRN pay on interest over a twelve month period?

d$.$ What is total interest expense for the first month of the loan as reported on the income statement for the quarter ending April $30,2023?($assume a $30-$day month, $360-$day year$).$

d$.$ What is the expected net liability $($carrying value$)$ of the loan reported on the third$-$quarter balance sheet date December $31,2028.$

e$.$ Assume FTRN elects to repay the debt early, in $2025.$ According to the contract, FTRN will pay note$-$holders $103\%$ of face value. The carrying value of the notes at the time of repayment is $$1,010$ million. What gain or loss on extinguishment of debt will FTRN report?