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Why is interest expense not equal to interest actually paid

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Q1) Bonds are frequently issued at amounts higher or lower than face value. Describe how the market interest rate, relative to the coupon interest rate, affects the selling price of bonds.

Q2) A company sold $100,000 bonds at $94 and the coupon interest rate was 4%. Why is the interest expense not equal to the interest actually paid?

Reference no: EM132792252

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