Question - Thornhill Inc., issued $2500000 of 9% bonds on June 30,2012, due on June 30, 2025 with interest payable semi-annually. The market interest rate for similar financial instruments, at time of issuance, is 10%.
Note: After finding the (n, i) for the stream of interest payments, use the same (n, i) when finding the PV of the principal; Interest is not paid the day bonds are issued.
a. How much is each interest payment?
b. How much will the company receive when the bonds are bought?