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Question 2 3 pts ABC Company issued $100,000 of bonds with a 10% coupon rate of interest. When ABC issued the bonds, the market rate
Question 2 3 pts ABC Company issued $100,000 of bonds with a 10% coupon rate of interest. When ABC issued the bonds, the market rate of interest was 8%, and they sold them for $120,000 cash. Which of the following statements is incorrect? The book value of the bonds will decrease as the bond matures. Annual interest expense will be more than the company's annual cash interest payments. Annual interest expense will be less than the company's annual cash interest payments. The bonds were issued at a premium. Question 3 3 pts Which of the following statements does not correctly describe the accounting for bonds that were issued at their face value (i.e., also known as par value)? The book value of the bond liability decreases when interest payments are made on the due dates. The market rate of interest equals the coupon rate. The interest expense over the life of the bonds will equal the total cash interest payments. The selling price of the bonds equals the bonds' maturity value
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