1. When debt is issued at a premium, interest expense over the term of debt equals the cash interest paid

a. Minus premium

b. Minus premium minus par value.

c. Plus premium.

d. Plus premium plus par value.

2. On May 1 of the current year, Cassandra Corp. issued $600,000 of 4% bonds payable at par with interest payment dates of April 1 and October 1. In its income statement for the current year ended December 31, what amount of interest expense should Cassandra report?

a. 10,000

b. 4,000

c. 14,000

d. 16,000