Question - On July 1, 20X4, MPT bought 100,000 of General Company Inc.'s bonds for $250,000 plus brokerage costs of $145. The interest rate on the bonds is 7% per annum, which is equal to the market rate. Interest is paid on June 30 and December 31 each year. MPT intends to hold the bonds until they mature on June 30, 20X9. At year end, MPT had not yet received the semi-annual interest payment that was due on December 31, 20X4. The market value of the bonds was $254,500 on December 31, 20X4.
a) What is the face value of the bond?
b) Calculate the semi-annual interest payment for December 31,20X4?