Bonds Flashcards
1
Q
What is interest expense?
A
Carrying amount x Effective interest rate
2
Q
What is cash payment
A
Face amount x stated interest rate
3
Q
What are other terms for the stated interest rate?
A
stated
coupon
contract
nominal
4
Q
What is another term for the market rate?
A
Effective rate
5
Q
If the stated rate is greater than the market rate, what would the bonds sell for?
A
Premium
6
Q
If the stated rate is less than the market rate, what would the bonds sell for?
A
Discount
