Which of the following statements about bonds is correct? a.The cash interest paid is calculated as...
Which of the following statements about bonds is correct?
a.The cash interest paid is calculated as the bond face value × the face rate of interest.
b.The difference between the interest expense and the interest paid is deducted from the carrying value of the bonds if bonds were sold at a discount.
c.The difference between the cash interest paid and the interest expense is added to the carrying value of the bonds if bonds were sold at a premium.
d.The cash interest paid is calculated as the bond face value × the effective rate of interest.
Homework Answers
Cash interest paid = Face vale of the bond * Face rate of interest
The answer is a.
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if $691,000 of 8% bonds are issued at 94, what is the amount of cash recieved...
if
$691,000 of 8% bonds are issued at 94, what is the amount of cash
recieved from the sale ?
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