If a bond is trading at 98 the:
A)the interest expense is greater than the interest payment
B)the interest expense is less than the interest payment
C)the interest expense is equal to the interest payment
D)the interest expense can not be determined

Question

Quizplus · Accepted Answer

When a bond is trading at a discount (below 100), the interest expense is greater than the interest payment because the discount is amortized as an additional expense over the life of the bond.

If a Bond Is Trading at 98 The