On January 1, 2016, Marks Inc. issued $5,000,000, 6%, 10 year bonds at 97. The bonds pay interest semi-annually on June 30 and December 31. Which of the following statements is false?
A. When bonds mature (at the end of the 10 years), Marks, Inc. will have to pay back cash totaling $4,850,000.
B. On January 1, 2016, Marks, Inc. received cash of $4,850,000.
C. The Marks, Inc. bonds were issued at a discount.
D. The semi-annual cash payments to bondholders will be $150,000
Ans: A. When bonds mature (at the end of the 10 years), Marks, Inc. will have to pay back cash totaling $4,850,000.
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