A bond with a maturity value of $700,000 was initially issued for $715,000.The bond has a ten-year life and a stated interest rate of 10%.The total interest expense over the life of the bond is
A)$700,000.
B)$715,000.
C)$685,000.
D)not determinable without knowing the bond's effective yielD.

Question

Quizplus · Accepted Answer

Cash interest payments of $700,000 ($700,000 × 10% × 10 years)minus $15,000 (the bond premium).

A Bond with a Maturity Value of $700,000 Was Initially