A Company Issues 8% Bonds with a Par Value of $40,000

question 72

Multiple Choice

A company issues 8% bonds with a par value of $40,000 at par on January 1.The market rate on the date of issuance was 7%.The bonds pay interest semiannually on January 1 and July 1.The cash paid on July 1 to the bond holder(s) is:

• A)$3,200.
• B)$2,800.
• C)$1,600.
• D)$1,400.
• E)$0.

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