On NOVEMBER 30,2011,Just in Thyme,Inc.issued $10,000 of 20-year,9% bonds at 100.The bonds pay interest SEMIANNUALLY on May 31 and November 30.How much cash did Just in Thyme receive when the bonds were issued?
A)$10,000
B)$10,900
C)$9,100
D)$0

Question

On NOVEMBER  30,2011,Just in Thyme,Inc.issued $10,000 of 20-year,9% bonds at 100.The bonds pay interest SEMIANNUALLY  on May 31 and November 30.How much cash did Just in Thyme receive when the bonds were issued?
A)$10,000
B)$10,900
C)$9,100
D)$0

Quizplus · Accepted Answer

Just in Thyme received $10,000 in cash when the bonds were issued. The face value of the bonds is $10,000 and they were sold at par (100% of face value), so the cash received is equal to the face value.