Adonis Corporation issued 10-year,8% bonds with a par value of $200,000.Interest is paid semiannually.The market rate on the issue date was 7.5%.Adonis received $206,948 in cash proceeds.Which of the following statements is true?
A)Adidas must pay $200,000 at maturity and no interest payments.
B)Adidas must pay $206,948 at maturity and no interest payments.
C)Adidas must pay $200,000 at maturity plus 20 interest payments of $8,000 each.
D)Adidas must pay $206,948 at maturity plus 20 interest payments of $8,000 each.
E)Adidas must pay $200,000 at maturity plus 20 interest payments of $7,500 each.

Question

Quizplus · Accepted Answer

Adonis Corporation must pay the par value of $200,000 at maturity and make 20 semiannual interest payments of $8,000 each (4% of $200,000).

Adonis Corporation Issued 10-Year,8% Bonds with a Par Value of $200,000.Interest