Questions Bonds A company issues term bonds totaling $300,000 on January 1, 2014. The bonds have a coupon rate of 5%, pay interest semi-annually on January 1st and July 1st of each year, and mature in 10 years. 6% Annual Market Rate of Interest (Bond Discount) In this scenario, the coupon rate of 5% is less than the prevailing market rate of 6%. Therefore, this bond will be issued at a discount. This means that the proceeds received