Question
Chello Inc issued $200,000, 6%, 10-year bonds, with interest payable semiannually. The market rate on the issue date was 5.5%. Chello received $207,614 in proceeds.
Chello Inc issued $200,000, 6%, 10-year bonds, with interest payable semiannually. The market rate on the issue date was 5.5%. Chello received $207,614 in proceeds. Which statement best describes Chello' responsibility to the bondholders?
Select one:
A.Chello Inc must pay $200,000 at maturity plus 20 interest payments of $6,000 each.
B.Chello Inc must pay $207,714 at maturity plus 20 interest payments of $6,000 each.
C.Chello Inc must pay $200,000 at maturity plus 10 interest payments of $12,000 each.
D.Chello Inc must pay $206,948 at maturity.
E.Chello Inc must pay $200,000 at maturity.
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