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What interest expense on zero coupon bonds is

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Reference no: EM132817147

Problem 1: When bonds are retired prior to maturity, a company recognizes a gain if the call price of the bonds is:

a. Less than the current book value of the bonds plus any unamortized bond issue costs.

b. Less than the current book value of the bonds less any unamortized bond issue costs.

c. More than the current book value of the bonds plus any unamortized bond issue costs.

d. More than the current book value of the bonds less any unamortized bond issue costs.

Problem 2: Interest expense on zero coupon bonds is:

a. The market rate times the book value of the bonds at the end of the period.

b. The market rate times the book value of the bonds at the beginning of the period.

c. The stated rate times the face value of the bonds at the beginning of the period.

d. The stated rate times the book value of the bonds at the end of the period.

Reference no: EM132817147

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