Question

On January 1, 2018, Vacation Destinations issues $22 million of bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below:

(1)	(2)	(3)	(4)	(5)
Date	Cash Paid for Interest	Interest Expense	Increase in Carrying Value	Carrying Value
1/1/2018				$20,569,127
6/30/2018	$880,000	$925,611	$45,611	20,614,738
12/31/2018	880,000	927,663	47,663	20,662,401
1. Were the bonds issued at face amount, a discount, or a premium? Face amount Discount Premium 2. What is the original issue price of the bonds? (Enter your answer in dollars, not millions. (i.e., $5.5 million should be entered as 5,500,000).) 3. What is the face amount of the bonds? (Enter your answer in dollars, not millions. (i.e., $5.5 million should be entered as 5,500,000).) 4. What is the stated annual interest rate? Stated annual interest rate 5. What is the market annual interest rate? 6. What is the total cash paid for interest assuming the bonds mature in 10 years? (Enter your answer in dollars, not millions. (i.e., $5.5 million should be entered as 5,500,000).) Total cash interest

Answer 1