Response to the following problem:
A corporation issues $40,000,000 of 6% bonds to yield an effective interest rate of 8%.
a. Was the amount of cash received from the sale of the bonds more or less than $40,000,000?
b. Identify the following amounts related to the bond issue: (1) face amount, (2) market rate of interest, (3) contract rate of interest, and (4) maturity amount.