PowerTap Utilities is planning to issue bonds with a face value of $2,200,000 and a coupon rate of 8 percent. The bonds
mature in 9 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1
of this year. PowerTap uses the effective-interest amortization method. Assume an annual market rate of interest of 10
percent. (EV of $1. PV of $1. FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)
Required:
1. What was the issue price on January 1 of this year? (Round your final answers to nearest whole dollar amount.)
Issue price?
Interest expense for June 30 and December 31st.