Question
Sun City issues $41 million of bonds on January 1, 2024 that pay interest semiannually on June 30 and December 31. A portion of the
Sun City issues $41 million of bonds on January 1, 2024 that pay interest semiannually on June 30 and December 31. A portion of the bond amortization schedule appears below: Date Cash Paid Interest Expense Decrease in Carrying Value Carrying Value 01/01/2024 $49,115,037 06/30/2024 $2,050,000 $1,964,601 $85,399 49,029,638 12/31/2024 2,050,000 1,961,186 88,814 48,940,824 Required: 1. Were the bonds issued at face amount, a discount, or a premium? 2. What is the original issue price of the bonds? 3. What is the face amount of the bonds? 4. What is the stated annual interest rate? (Hint: Be sure to provide the annual rate rather than the six-month rate.) 5. What is the market annual interest rate? (Hint: Be sure to provide the annual rate rather than the six-month rate.) 6. What is the total cash paid for interest assuming the bonds mature in 20 years?
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