Whole Foods Inc sold $5,000,000 worth of bonds on January 1, 2016 These bonds are 10 years bonds wit

Whole Foods Inc sold $5,000,000 worth of bonds on January 1, 2016 These bonds are 10 years bonds with a contract rate of interest of 8% However, the market rate of interest at the time of the sale by underwriters to investors was 14% You are to answer the following question regarding this transaction

1 What is the purchase price of the bonds at the time they were first issued?

2 What would be the total amount of interest paid by Whole Foods Inc during the entire duration of the bond’s outstanding liability?

3 What is the amount of interest expense incurred by Whole Foods Inc during the entire first year the bond payable was a liability?

4 Suppose the market rate of interest had been only 4%, then what would be the cash proceeds for the bond transaction with this lower market rate of interest?

5 Again assuming a 4% market rate what would be the amount of interest expenses incurred by Whole Foods Inc during the first year of the bond liability?

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