What princeton total interest expense over the ten year

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Problem 1: On January 1, Princeton, Inc. issued $2 million of 8% bonds at 93.5% of par, based on an effective rate of 9%. The bonds pay interest on June 30 and December 31. Using the effective interest rate method, Princeton's bond liability immediately after the first coupon payment is made is closest to:

A) $1,870,000.

B) $1,874,150.

C) $2,000,000.

Problem 2: On January 1, Princeton, Inc. issued $2 million of 8% bonds at 93.5% of par, based on an effective rate of 9%. The bonds pay interest on June 30 and December 31. Princeton's total interest expense over the 10 year term of the bonds is closest to:

A) $1,600,000.

B) $1,683,000.

C) $1,730,000.

 

Reference no: EM132656267

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