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Which statement is true of fredrick corporation

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Question - Fredrick Corporation issues a $1,000 bond with a stated rate of interest of 4% and an effective rate of interest of 5%. Which of the following statement is true of Fredrick Corporation?

A) The interest expense of the company will be reduced in the year of issue

B) The company will pay less than the face value of bond to the buyer

C) The company will collect only the face value of bond

D) The buyer will pay less than the face value for bond

E) The buyer will pay more than the face value of bond

Reference no: EM133157568

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