Interest Expense and Price of Bonds
5. On June 30, 2011, Gunderson Electronics issued 8% stated rate bonds with a faceamount of $300 million. The bonds mature on June 30, 2031 (20 years). The marketrate of interest for similar bond issues was 10% (5% semiannual rate). Interest is paidsemiannually (4%) on June 30 and December 31, beginning on December 31, 2011.Required:a. Determine the price of the bonds on June 30, 2011.b. Calculate the interest expense Gunderson reports in 2011 for these bonds.