If bonds sell at a premium, the interest expense recognized each year will be greater than the contractual interest rate.

Name: If bonds sell at a premium, the interest expense recognized each year will be greater than the contractual interest rate.
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When bonds sell at a premium, the interest expense recognized each year is less than the contractual interest rate because the premium effectively reduces the cost of borrowing over the life of the bond.

If Bonds Sell at a Premium, the Interest Expense Recognized