Adonis Corporation issued 10-year, 7% bonds with a par value of $130,000. Intere
ID: 2449417 • Letter: A
Question
Adonis Corporation issued 10-year, 7% bonds with a par value of $130,000. Interest is paid semiannually. The market rate on the issue date was 6%. Adonis received $139,674 in cash proceeds. Which of the following statements is true?
Adidas must pay $139,674 at maturity plus 20 interest payments of $4,550 each.
Adidas must pay $139,674 at maturity and no interest payments.
Adidas must pay $130,000 at maturity and no interest payments.
Adidas must pay $130,000 at maturity plus 20 interest payments of $4,550 each.
Adidas must pay $130,000 at maturity plus 20 interest payments of $3,900 each.
Explanation / Answer
True statement : Adidas must pay $130,000 at maturity plus 20 interest payments of $4,550 each