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31) The net liability of bonds will decrease each interest

Question : 31) The net liability of bonds will decrease each interest : 1406040

 

31) The net liability of bonds will decrease each interest period if the bonds were issued at a premium.

32) The effective-interest method of amortization keeps interest expense at the same percentage of the bond's carrying value for every interest payment over the bond's life.

33) Coupon rate and nominal interest rate are both used to describe the rate of interest to be paid on a bond.

34) The market interest rate is affected by general economic conditions, industry conditions, risks of the use of the proceeds, and specific features of the bonds.

35) On the day of issuance, the proceeds to the issuer may be above par or below par, depending on market conditions. If the proceeds are above par, the bonds have been sold at a discount.

36) The excess of the proceeds over the face amount of a bond is called premium on bonds.

37) The spreading of the discount over the life of the bonds is called discount amortization.

38) The difference between the effective-interest amount and the cash interest payment is the amount of discount amortized for the period.

39) Implicit interest is a form of interest expense that is not explicitly recognized in a loan agreement.

 

 

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