Murray Corp issued 10-year, 8% bonds with a par value of $200,000. Interest is p

Question

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

Explanation / Answer

E. Murray Corp must pay $200,000 at maturity plus 20 interest payments of $7,500 each.

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