Non-Current (Long-Term) Liabilities

Question 1

The sales proceeds of a bond issue are determined by discounting future cash
payments using the ____ rate of interest at the time of issuance ( _______ interest rate). The reported interest expense on bonds is based on the _______ interest rate.

Answer 1

market, effective, effective

Question 2

An issuer ______ any issuance discount or premium on bonds over the life of the bonds.

Answer 2

amortises