Qu. 164 Sun City issues... Sun City issues $52 million of bonds on January 1,...
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Qu. 164 Sun City issues... Sun City issues $52 million of bonds on January 1, 2018 that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below:
| Date | Cash Paid | Interest Expense | Decrease in Carrying Value | Carrying Value |
| 1/1/2018 | $ 65,053,443 | |||
| 6/30/2018 | 1,820,000 | 1,626,336 | 193,664 | 64,859,779 |
| 12/31/2018 | 1,820,000 | 1,621,494 | 198,506 | 64,661,273 |
|
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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