A bond issued at a discount will pay total cash payments for interest that is more than the total interest expense recognized over the life of the bond.

Name: A bond issued at a discount will pay total cash payments for interest that is more than the total interest expense recognized over the life of the bond.
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Question

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When a bond initially sells at a discount, the interest expense over the life of the bond equals the cash interest payments plus the initial amount of discount on bonds payable.

A Bond Issued at a Discount Will Pay Total Cash