Adidas 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%. Adidas received $206,948 in cash proceeds. Which of the following statements is ?

Question

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Adidas must pay the par value of $200,000 at maturity. Since the bonds have a coupon rate of 8% and the par value is $200,000, the annual interest payment is $16,000. Given that interest is paid semiannually, there will be two payments of $8,000 each year for 10 years, totaling 20 payments of $8,000 each.

Adidas Issued 10-Year, 8% Bonds with a Par Value of $200,000