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Adonis Corporation issued 10-year, 9% bonds with a par value of $120,000. Interest is paid semiannually. The market rate on the issue date was 8%.

Adonis Corporation issued 10-year, 9% bonds with a par value of $120,000. Interest is paid semiannually. The market rate on the issue date was 8%. Adonis received $128,156 in cash proceeds. Which of the following statements is true?

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  • Adonis must pay $120,000 at maturity and no interest payments.

  • Adonis must pay $120,000 at maturity plus 20 interest payments of $4,800 each.

  • Adonis must pay $128,156 at maturity plus 20 interest payments of $5,400 each.

  • Adonis must pay $120,000 at maturity plus 20 interest payments of $5,400 each.

  • Adonis must pay $128,156 at maturity and no interest payments.

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