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Squabb Corporation issued a $ 1 2 , 0 0 0 , 0 0 0 , 5 - year bond, with a contract rate of

Squabb Corporation issued a $12,000,000,5-year bond, with a contract rate of 8%. The market rate of interest for similar bonds was 6%. Interest is payable semi-annually.
What is the amount of interest expense Squabb Corporation will recognize with each semi-annual interest payment to bondholders? Round to the nearest whole dollar.
a)$480,000
b)$474,611
c)$582,358
Blu-Star Corporation issues a $15,000,000,20-year bond with a contract rate of 9%. The market rate of interest for similar bonds is 10%. Interest is payable semi-annually.
What is the amount of interest expense Blu-Star Corporation will recognize with each semi-annual interest payment to bondholders? Round to the nearest whole dollar.
a) $491,300
b) $707,172
c) $822,200
d) $675,000

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