Matching
Match the following terms to the most appropriate answer:
Premises:
bond premium
interest expense
amortization
bond discount
effective rate
interest payment
contract rate
Responses:
the rate printed on the bond certificate
if the contract rate is less than the effective rate
if the contract rate exceeds the effective rate
the return required by the market on the day of issuance
face value times contract rate
the allocation of a premium or discount over the life of a bond
the value reported on the income statement
Correct Answer:
Premises:
Responses:
bond premium
interest expense
amortization
bond discount
effective rate
interest payment
contract rate
Premises:
bond premium
interest expense
amortization
bond discount
effective rate
interest payment
contract rate
Responses:
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