Simon issues four-year bonds with a $50,000 par value on June 1, 2011, at a price of $47,974. The annual contract rate is 7%, and interest is paid semiannually on November 30 and May 31.

To calculate the interest payments and bond discount/premium for Simon's four-year bonds, we need to follow these steps:

1. Determine the number of semiannual interest periods: Since the bonds pay interest semiannually, we have a total of eight (4 years x 2) semiannual interest periods.

2. Calculate the semiannual coupon payment: The annual contract rate is 7%, so the semiannual coupon rate is half of that (3.5%). Multiply the semiannual coupon rate by the par value to get the semiannual coupon payment:
Semiannual coupon payment = (Par value) x (Semiannual coupon rate)
= $50,000 x 3.5%
= $1,750

3. Calculate the present value of the bond: To determine how much the bond is worth at issuance, we need to calculate the present value of all future cash flows, including both the coupon payments and the par value.

a. Calculate the present value of the coupon payments: Since the coupon payments are made semiannually, we need to discount each payment using the semiannual yield rate. The yield rate is the rate of return required by the investor. In this case, we are not given the yield rate, so we cannot calculate the present value precisely. However, we can use the given bond price to estimate the yield rate.

b. Calculate the present value of the par value: The par value is the final payment received at maturity. We also need to discount this value to its present value.

c. Calculate the sum of all present values to get the bond price: Add the present value of the coupon payments and the present value of the par value to calculate the bond price.

4. Calculate the bond discount/premium: Subtract the bond price from the par value to determine if the bonds are issued at a discount or a premium. If the bond price is less than the par value, it is a discount; if the bond price is more than the par value, it is a premium.

Note that we need the yield rate to calculate the present value of the bond precisely. However, in this case, we are only given the bond price, so we can't determine the bond discount/premium without additional information.