Saved Help Save & E: On January 1, 2021, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: Cash Effective Increase in Balance Outstanding Balance Payment Payment Interest 6,544,432 6,555,654 6,567,437 6,579,809 6,592,799 6,606,439 6,620,761 1 316, 000 316, еее 327,222 327,783 328,372 328,990 329,640 330,322 11,222 11,783 12,372 12,990 13,640 14,322 2 316,000 316,000 316,000 316,000 4 6 38 316,000 316,000 316,000 384,243 387,655 391,243 68,243 7,753,102 7,824,757 7,900,000 39 71,655 75,243 40 Required: 1. What is the face amount of the bonds? 2. What is the initial selling price of the bonds? 3. What is the term to maturity in years?
Saved Help Save & E: On January 1, 2021, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: Cash Effective Increase in Balance Outstanding Balance Payment Payment Interest 6,544,432 6,555,654 6,567,437 6,579,809 6,592,799 6,606,439 6,620,761 1 316, 000 316, еее 327,222 327,783 328,372 328,990 329,640 330,322 11,222 11,783 12,372 12,990 13,640 14,322 2 316,000 316,000 316,000 316,000 4 6 38 316,000 316,000 316,000 384,243 387,655 391,243 68,243 7,753,102 7,824,757 7,900,000 39 71,655 75,243 40 Required: 1. What is the face amount of the bonds? 2. What is the initial selling price of the bonds? 3. What is the term to maturity in years?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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On January 1, 2021, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June 30 and
December 31. Portions of the bond amortization schedule appear below:
Cash
Effective
Increase in
Outstanding
Payment
Payment
Interest
Balance
Balance
6,544,432
6,555,654
6,567,437
6,579,809
6,592,799
6,606,439
6,620,761
1
316, 0ее
316,000
316,000
316,000
316, е0е
316,000
327,222
327,783
328,372
328,990
329,640
330,322
11,222
11,783
12,372
12,990
13,640
14,322
3.
4
6
38
316,000
316,000
316,000
384,243
387,655
391,243
68,243
71,655
75,243
7,753,102
7,824,757
7,900,000
39
40
Required:
1. What is the face amount of the bonds?
2. What is the initial selling price of the bonds?
3. What is the term to maturity in years?
4. Interest is determined by what approach?
5. What is the stated annual interest rate?
6. What is the effective annual interest rate?
7. What is the total cash interest paid over the term to maturity?
8. What is the total effective interest expense recorded over the term to maturity?
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