Starting in 2004, Chuck and Luane have been purchasing Series EE bonds in their name to use for the higher education of their daughter Susie, who currently is age 18. During the year, they cash in $12,000 of the bonds to use for freshman year tuition, fees, and room and board. Of this amount, $5,000 represents interest. Of the $12,000, $8,000 is used for tuition and fees, and $4,000 is used for room and board. Chuck and Luane's AGI, before the educational savings bond exclusion, is $120,000.

If an amount is zero, enter "0".

a. Chuck and Luane, who will file a joint return, and Susie want to understand the tax consequences. For each statement below, help them by indicating whether the statement is "True" or "False".