PROBLEM 1: Bama Company sold $850,000 par value 12-year bonds on January 1, 2020. The bonds pay interest semiannually (assume payment dates are June 30 and December 31 each year) and have a stated rate of 5.5%. The bonds were issued on January 1st to bond investors at a price to yield 4.6%. Required: 1. How much cash will Bama receive from the issuance of the bond? Show your calculations or elements of your present valuation formula. Make sure your final answer is well labeled (bold font or circled). 2. Did you find the in was issued at a discount or a premium? Explain whether this is consistent with what you expected given the relationship between the stated rate and issue rate of interest. 3. Using Excel, prepare an amortization schedule for the bond. Make sure the dates of each payment period is clearly labeled (which will help you with the questions below. 4. Bama issues its financial statements on December 31, 2021 Complete the financial statement table in the answer sheet to reflect how the bond will be represented in the 2021 inancial statements for the year ended December 31, 2021. Income Statement Balance Sheet Statement of Cash Flows 5. What is the impact on the financial statement template for the December 31, 2024 payment? Make sure to clearly indicate the direction of the changes and the relevant amounts. (There are two lines in the template below - one for the direction and one for the amount.) Cash BALANCE SHEET Noncash Assets Liabilities Cont. Capital Retained Earnings |--INCOME STATEMENT ------ Net Revenues Expenses Income Assets 6. Immediately after making the December 31, 2026, payment, Bama retires 40% (1.c. the company retires $340,000 face value of the bonds) by purchasing them on the market. Bama pays $325,000 to retire the bonds. Complete the financial statement template in the answer sheet for this transaction. Make sure to indicate the direction of changes and the relevant amounts. (There two lines provided in the template - one for direction and one for amount.) Show any additional calculations in the space below the template. Cash Assets -BALANCE SHEET Noncash Assets Liabilities Cont. Capital Retained Earnings |--INCOME STATEMENT Net Revenues Expenses Income 7. Given the information in #6 above, when Bama pays $325,000 to retire the bonds on December 31, 2026, what does this transaction imply about the market rate of interest for the bonds on this date? Show the inputs to your present value calculation and your answer (bold font) in the box below. (Round your rate to two decimal places.)