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On January 1, 2018, 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 nterest Balance 438,361 430,000438,863 430,000439,395 430,000439,958 440,556 430,800 441,189 Balance 7,306,018 7,314,379 7,323,242 7,332,637 7,342,595 7,353,151 7,364,340 430,800 8,361 8,863 9,395 9,958 10,556 11,189 430,000 38 39 40 430,000 502,207 430,000 506,540 430,000 511,133 72,287 76,540 81,133 8,442, 327 8,518,867 8,600,000 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? 1 Face amount 2. Initial seling price
38 39 40 430,000502,207 430,000 430,000511,133 72,207 76,540 81,133 8,442,3227 8,518,867 8,600,00e 506,540 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. Wh at is the total effective interest expense recorded over the term to maturity? 1.Face amount 2. Initial selling price 3. Term to maturity 4 Interest is determined by what approach? 5. Annual interest rate 6. Effective annual interest rate 7 Total cash interest paid 8 Effective interest expense years
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