Read each statement? below, indicate if it is true or? false, and give a brief e

Question

Read each statement? below, indicate if it is true or? false, and give a brief explanation of your answer.

3. When a bond is issued at a discount, the semiannual amount of interest expense will be greater than the cash payment for interest. 0 A. when a bond is Issued at a discount, the cash payment for interest will be greater than the semiannual amount of Interest expense. ? B. because when a bond is Issued at a discount, the market rate Is lower than the contract (stated) rate O C. when a bond is Issued at a discount, the semlannual amount of Interest expense equals the cash payment tor interest. O D. because interest expense includes both cash interest and amortization of the discount.

Explanation / Answer

True, because interest expense includes both cash interest and amortization of discount

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