Which of the following statements about accounting for long-term debt is least accurate()
A: For a bond issued at par, interest expense = coupon rate x face value.
B: For a discount coupon bond, cash flow from operations will decrease by the amount of the periodic coupon payment.
C: A bond issued at a discount results in lower cash flow from operations and higher cash flow from financing than a bond issued at a premium.
A: For a bond issued at par, interest expense = coupon rate x face value.
B: For a discount coupon bond, cash flow from operations will decrease by the amount of the periodic coupon payment.
C: A bond issued at a discount results in lower cash flow from operations and higher cash flow from financing than a bond issued at a premium.
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- Which one of the following is issued at a discount to its redemption value and pays its holder no interest during its life? A: A deep discount bond B: A long-term bond issued by the government C: An unsecured loan note D: A zero coupon bond
- A coupon bond pays the owner of the bond a fixed interest payment (coupon payment) every year until the maturity date, when a specified final amount (face value or par value) is repaid. ( ) A: True B: False
- (I) A discount bond requires the borrower to repay the principal at the maturity date plus an interest payment. (II) A coupon bond pays the lender a fixed interest payment every year until the maturity date, when a specified final amount (face or par value) is repaid.
- a bond offers an annual coupon rate of 4%, with interest paid semiannually. The bond matures in two years. At a market discount rate of 6%, the price of this bond per 100 of par value is closest to
- The coupon rate of bond is the interest rate specified in the bond, which is equal to the ratio of the annual interest over the value of bond.