Texxon Corporation issued $500,000 of 8%, 10-year bonds. Interest is paid semiannually. Assume that the market rate for similar investments is 6 percent.

1. What is the semi-annual cash payment amount for this bond issue?

 

1. What is the present value (issue price) of this bond issue at the market rate of interest?

 

1. How much bond interest expense should be recorded on the first semi-annual interest payment date?

 

1. These bonds would be issued at a premium (i.e., your answer to #2 should be more than $500,000).What amount of premium will be amortized on the first semi-annual interest payment date?

 

1. What is the carrying value of the bonds after the first semi-annual interest payment date?