A $500,000 bond issue sold for $490,000. Therefore, the bonds:

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A $500,000 bond issue sold for $490,000. Therefore, the bonds:

A) Sold at a discount because the stated interest rate was higher than the market rate.

B) Sold for the $500,000 face amount less $10,000 of accrued interest.

C) Sold at a premium because the stated interest rate was higher than the market rate.

D) Sold at a discount because the market interest rate was higher than the stated rate.

Answer: D

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