Question
56. If bonds are issued initially at a premium and the effective-interest method of amortization is used, interest expense in the earlier years will be
56. If bonds are issued initially at a premium and the effective-interest method of amortization is used, interest expense in the earlier years will be greater than if the straight-line method were used. *
True
False
57. The cash paid for interest will always be greater than interest expense when using effective-interest amortization for a bond. *
True
False
58. A bond may only be issued on an interest payment date. *
True
False
59. When the interest payment dates of a bond are May 1 and November 1, and a bond issue is sold on June 1, the amount of cash received by the issuer will be increased by accrued interest from May 1 to June 1. *
True
False
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