Market rate at the date of issuance

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Reference no: EM13147280

Sears issues bonds with a par value of $175,000 on January 1, 2009. The bonds' annual contract rate is 4%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 6%, and the bonds are sold for $165,523.

What is the amount of the disc on these bonds at issuance?

How much total bond interest expense will be recognized over the life of these bonds?

Reference no: EM13147280

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