Adidas issued 10-year, 11% bonds with a par value of $110,000. Interest is paid

Question

Adidas issued 10-year, 11% bonds with a par value of $110,000. Interest is paid semiannually. The market rate on the issue date was 10%. Adidas received $116,855 in cash proceeds. Which of the following statements is True?

Adidas must pay $110,000 at maturity plus 20 interest payments of $5,500 each.
Adidas must pay $110,000 at maturity plus 20 interest payments of $6,050 each.
Adidas must pay $110,000 at maturity and no interest payments.
Adidas must pay $116,855 at maturity plus 20 interest payments of $6,050 each.
Adidas must pay $116,855 at maturity and no interest payments.

Explanation / Answer

Must pay 110000 plus 20 interest payments of 6050. 2nd option is the right one.

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