Adonis Corporation 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%. Adonis received $206,948 in cash proceeds. Which of the following statements is true?
A. Adonis must pay $200,000 at maturity plus 20 interest payments of $8,000 each.
B. Adonis must pay $200,000 at maturity and no interest payments.
C. Adonis must pay $206,948 at maturity plus 20 interest payments of $8,000 each.
D. Adonis must pay $200,000 at maturity plus 20 interest payments of $7,500 each.
E. Adonis must pay $206,948 at maturity and no interest payments.
Answer: A
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