Dugan Company issued $30 million face amount of 10% bonds when the market interest rate was 10.5% for bonds of similar risk. How much interest will be PAID annually on these bonds?

a. $3,150,000

b. $3,000,000

c. Some other amount

The bonds were issued at __________,

a. a premium

b. a discount.

c. par

The annual interest EXPENSE will be _____________ the amount of interest paid.

a. cannot be determined

b. equal to

c. less than

d. more than

Which of the following is NOT usually associated with bonds?

Select one:

a. Maturity value

b. Maturity rate

c. Coupon rate

d. Face amount