On June 30, 2018, Gunderson Electronics issued 8% stated rate bonds with a face amount of $300 million. The bonds mature on June 30, 2038 (20 years). The market rate of interest for similar bond issues was 10% (5% semiannual rate). Interest is paid semiannually (4%) on June 30 and December 31, beginning on December 31, 2018.
Required:
a. Determine the price of the bonds on June 30, 2018.
b. Calculate the interest expense Gunderson reports in 2018 for these bonds.

Question

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The Answer of On June 30, 2018, Gunderson Electronics issued 8% stated rate bonds with a face amount of $300 million. The bonds mature on June 30, 2038 (20 years). The market rate of interest for similar bond issues was 10% (5% semiannual rate). Interest is paid semiannually (4%) on June 30 and December 31, beginning on December 31, 2018.
Required:
a. Determine the price of the bonds on June 30, 2018.
b. Calculate the interest expense Gunderson reports in 2018 for these bonds.

On June 30, 2018, Gunderson Electronics Issued 8% Stated Rate