On January 1, 2016, Tennessee Harvester Corporation issued debenture bonds that pay interest semi…

On January 1, 2016, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below:

     Payment Cash
Payment Effective
Interest Increase in Balance Outstanding
Balance 7,041,478    1           340,000      352,074      12,074       7,053,552    2           340,000      352,678      12,678       7,066,230    3           340,000      353,311      13,311       7,079,541    4           340,000      353,977      13,977       7,093,518    5           340,000      354,676      14,676       7,108,194    6           340,000      355,410      15,410       7,123,604    ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 38           340,000      413,426      73,426       8,341,950    39           340,000      417,098      77,098       8,419,048    40           340,000      420,952      80,952       8,500,000

     Required: 1.

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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? Effective interest rate Straight-line 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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