Mars Corp.issued ten year bonds with a maturity value of $400,000.If the bonds were issued at a premium, this indicates that
A)the market rate was higher than the stated rate.
B)the stated rate was higher than the market rate.
Long-Term Financial Liabilities 14- 9
C)the market and stated rates were the same.
D)no relationship exists between the two rates.

Question

Quizplus · Accepted Answer

When bonds are issued at a premium, it means the stated interest rate on the bonds is higher than the prevailing market interest rate, making the bonds more attractive to investors.

Mars CorpIssued Ten Year Bonds with a Maturity Value of $400,000