The interest that is paid to the bondholders is determined by the _________rate and the rate of interest expected by the investors who purchase the bonds is the ___________ rate.

A. Face, Coupon

b. Coupon, Stated

c. Coupon, Market

d. Effective, Market

On January 1, 2014, Robbins Company issued five-year, $500,000 face value, 8% bonds that paid interest semi-annually. The market rate of other similar bonds was 10%. What was the issue price of Robbins Companys bonds?

a. $500,000

b. $461,390

c. $465,209

d. $615,824

e. None of these answers are correct.

11. On January 1, 2014, Robbins Company issued five-year, $500,000 face value, 8% bonds that paid interest every June 30th and December 31st. The market rate of other similar bonds was 10%. What was the carrying value of the bonds on June 30th, 2016 assuming that Robbins uses the effective interest method to amortize the bond premium or discount? (Select the closest answer to the one you calculate):

a. $474,619

b. $478,350

c. $527,442

d. $483,226

e. None of these answers are correct.