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Figaro Company had the following information regarding afive-year bond that it issued on January 1, 2019.

		Cash		Interest		Amount		Carrying
		Paid		Expense		Amortized		Value
	Date	3%		4%
	1/1/19							$643,249
	7/1/19	$21,000		$25,729.96		$4,729.96		$647,978.86
	1/1/20	$21,000		$25,919.15		$4,919.15		$652,898.01
	7/1/20	$21,000		$26,115.92		$5,115.92		$658,013.93
	1/1/21	$21,000		$26,320.56		$5,320.56		$663,334.49
	7/1/21	$21,000		$26,533.38		$5,533.38		$668,867.87
	1/1/22	$21,000		$26,754.71		$5,754.71		$674,622.58
	7/1/22	$21,000		$26,984.90		$5,984.90		$680,607.49
	1/1/23	$21,000		$27,224.30		$6,224.30		$686,831.78
	7/1/23	$21,000		$27,473.27		$6,473.27		$693,305.06
	1/1/24	$21,000		$27,732.20		$6,732.20		$700,037.26

Required:

1. What is the coupon (face) rate of the bond?
2. What is the effective interest rate of the bond?
3. Was the bond issued at a premium, discount or par? How did youdetermine your answer?
4. How much total interest expense will Figaroreport on this bond in the year 2021?
5. On what financial statement would Figaro report the interestexpense?
6. How will Figaro report the bond on their 2021 Balance Sheet? Bespecific.
7. What is the maturity value of the bond?
8. Assume that, on January 1, 2022, Figaro pays $686,000 to retirethe bond. What is the gain or loss on redemption? Be sure to showyour calculations and specify whether there was a gain or aloss.
9. Prepare a financial statement effects template or journalentries showing:

1. The issuance of the bond
2. The payment of interest on July 1, 2021
3. The redemption of the bond on January 1, 2022.