Please answer the following:

a. How much cash flowed "in" and "out" on this bond issue, and how does the difference compare to total interest expense that was recognized?

b. Why couldn't Erik Food Supply Company sell its bonds at par? What is the difference between annual interest payments and semi-annual interest rates?

c. If you were selling a bond, would you rather pay interest once a year or twice?

Erik Food Supply Company issued $100,000 of face amount of 4-year bonds on January 1, 20X1. The bonds were issued at 98, and bear interest at a stated rate of 8% per annum, payable semiannually. The discount is amortized by the straight-line method