Adonis Corporation issued 10-year, 7% bonds with a par value of $130,000. Intere

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

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