27. When the interest payment dates of a bond are May 1 and November 1, and the bond is issued on June 1, the amount of interest expense at December 31 of the year of issuance would be fora.two months.b.six months.c.seven months.d.eight months. 28. For the issuer of ten-year bonds, the amount of amortization using the effective-interest method would increase each year if the bonds were sold at a DiscountPremium a. No Nob. Yes Yesc. No Yesd. Yes No

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EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter5: The Cost Of Money (interest Rates)

Section: Chapter Questions

Problem 11PROB

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27.

When the interest payment dates of a bond are May 1 and November 1, and the bond is issued on June 1, the amount of interest expense at December 31 of the year of issuance would be for

a.	two months.
b.	six months.
c.	seven months.
d.	eight months.

28.

For the issuer of ten-year bonds, the amount of amortization using the effective-interest method would increase each year if the bonds were sold at a

Discount	Premium

a.	No No
b.	Yes Yes
c.	No Yes
d.	Yes No

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