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Sunny Resort issues $58 million in bonds on January 1, 2021, that pay interest semiannually on June 30 and December 31. Portions of the bond
Sunny Resort issues $58 million in bonds on January 1, 2021, that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below:
(1) | (2) | (3) | (4) | (5) | ||||||||
Cash Paid for | Interest | Decrease in | Carrying | |||||||||
Date | Interest | Expense | Carrying Value | Value | ||||||||
1/1/2021 | $ | 65,279,805 | ||||||||||
6/30/2021 | $ | 1,740,000 | $ | 1,631,995 | $ | 108,005 | 65,171,800 | |||||
12/31/2021 | 1,740,000 | 1,629,295 | 110,705 | 65,061,095 | ||||||||
Use the above information to complete the following:
1a) Where the bonds issued at face amount, a discount, or a premium and what is the original issue price of the bonds? What is the face amount of the bonds?
1b) What is the stated annual interest rate? What is the market interest rate?
1c) What is the total cash paid for interest assuming the bonds mature in 20 years?
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