When bonds are issued at a premium, the total interest cost of the bonds over the life of the bonds is equal to the amount of
A)interest paid over the life of the bond.
B)interest paid over the life of the bond plus the amount of premium at sale point.
C)interest paid over the life of the bond minus the amount of premium at sale point.
D)premium at the sale point.

Question

Quizplus · Accepted Answer

When bonds are issued at a premium, the premium reduces the total interest cost over the life of the bonds, so the total interest cost is the interest paid minus the premium.

When Bonds Are Issued at a Premium, the Total Interest