On January 1, Year 4, Jones Realty Company issued 8 percent term bonds with a face amount of $1 million due January 1, Year 14 . Interest is payable semi-annually on January 1 and July 1 . On the date of issue, investors were willing to accept an
effective interest rate of 6 percent. Assume the bonds were issued on January 1, Year 4 . for $1,148,959 . The bonds were issued on January 1, Year 4, at
a. a premium.
b. an amortized value.
c. a discount.
d. face value.
e. par value.
Answer: A
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