Answer:
Santa Corporation
a. The bond's issue price = $901 (PV of all cash inflows).
b. The bond sold at a DISCOUNT.  The discount was $99 (equal to total amortization).
c. Bonds payable at the end of:
Year 1 = $931
Year 2 = $964
Explanation:
a) Data and Calculations:
Face value of bond = $1,000
Coupon rate = 6%
Interest payment = Annually on December 31
Bond's maturity period = 3 years
Annual market rate of interest = 10%
N (# of periods)  3
I/Y (Interest per year)  10
PMT (Periodic Payment)  60
FV (Future Value)  1000
Results
PV = $900.53 = $901
Sum of all periodic payments	$180.00
Total Interest	$279.47
Schedule
Date                           Cash Paid   Interest Expense  Amortization  Balance
January 1, Year 1                                                                                 $901
December 31, Year 1     $60                     $90                $30              931
December 31, Year 2      60                        93                  33             964
December 31, Year 3      60                        96                  36          1,000