Unanswered Submit Q10: Bonds and long-term notes Homework. Unanswered AAM Office Equip has issued $100,000,000 of bonds. They mature in 15 years and have a 7% coupon rate. When issued, the market rate for similar bonds was 8.75%. Assume this caused the bonds to be sold for $91,000,000. AAM amortizes and premiums and discounts on bonds using the straight line method. The bond pays interest annually with principle due at maturity. Total interest expense, assuming all payments on time the bond outstanding until maturity, will be 0 A $105,000,000 o B $ 96,000,000 O c $ 114,000,000 o D $ 219,000,000 O E $214,000,000 Unanswered Submit ABC. Corp invests excess cash in municipal bonds (which are tax exempt) rather than earn a paltry bank account return. For the year ending 12/31/2019, ABC was holding $2,500,000 of municipal bonds averaging a 7.5% interest rate. When preparing their books for FYE 2019, they realize this may cause a difference in taxable and pretax accounting income and any difference that does exist has a potential effect on future taxable income. Relating to municipal bond interest, which of the following is true: O A Future Taxable income is higher, creating a DTA o B Future taxable income is higher, creating a DTL O C Future tax deductions are higher, creating a DTL O D Future tax deductions are lower, creating a DTL O E None of the above is true 3. Meder Corp. uses the option to recognize installment sales of real property as taxable as the installment payments are collected. During 2018, installment sales of real property totaled $12,500. The beginning balance in notes receivable related to real property installment sales was $123,400 while the ending balance in that account was $126,300. What is the difference between pretax accounting income and taxable income based on this information? O A Taxable is $ 12,500 lower than pretax accounting income B Taxable is $ 12,500 higher than pretax accounting income Taxable is $ 2,900 lower than pretax accounting income D Taxable is $ 2,900 higher than pretax accounting income E Not enough information to determine