Asked by Letty Lopez on Jun 27, 2024
Verified
In which way do income bonds pay interest?
A) semiannually
B) annually
C) when earnings are higher than the interest expense
D) at maturity
Semiannually
Semiannually implies an occurrence or calculation that happens twice a year, often used in the context of interest payments or reporting periods.
Income Bonds
Bonds that pay interest only when the issuer has earned sufficient profits.
Interest Expense
Interest expense refers to the cost incurred by an entity for borrowed funds over a period of time.
- Ascertain the diverse revenues obtained from bonds and the manner in which they are subject to taxation.
Verified Answer
AR
Alejandra RodriguezJun 28, 2024
Final Answer :
C
Explanation :
Income bonds pay interest only when the issuing company's earnings are sufficient to cover the interest payments, making them different from traditional bonds that pay interest at regular intervals regardless of the issuer's earnings.
Learning Objectives
- Ascertain the diverse revenues obtained from bonds and the manner in which they are subject to taxation.