Asked by Amelia Bishop on Jun 18, 2024
Verified
When is interest expense less than interest paid?
A) when bonds are sold at a premium
B) when bonds are sold at par
C) when bonds are sold at a discount
D) when bonds are sold at a yield
Interest Expense
Financial obligations an entity must meet for the use of borrowed capital over a set period.
Interest Paid
The total amount of interest paid by the borrower to lenders over a specific period of time for the use of borrowed funds.
Premium
The amount paid for an insurance policy, above the standard cost or for bonds, it's the amount by which the bond's selling price exceeds its face value.
- Grasp the consequences of interest expense being more or less than interest paid.
Verified Answer
Learning Objectives
- Grasp the consequences of interest expense being more or less than interest paid.
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