On June 30,2011,Xanadu Corporation issued $200,000 of 10-year,8% bonds at 99.The bonds pay interest semi-annually on June 30 and December 31.These bonds sold at 99 because the ________.

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Bonds sold at a discount (less than par value) when the stated interest rate is less than the market rate. In this case, the bonds were sold at 99, which is less than the face value of $200,000, indicating that the market interest rate is higher than the stated 8% rate.

On June 30,2011,Xanadu Corporation Issued $200,000 of 10-Year,8% Bonds at 99.The