Amortizing a bond discount
Multiple Choice
o Decrease the Bonds Payable account
o Increases the market value of the Bonds Payable.
o Decreases Interest expense each period
o Allocates a portion of the tota discount to Interest expense each interest period.
o Increases cash fiows from tne bond
A disadvantage of bond financing is
Multiple Choice
o Interest on bonds is tax deductible
o Bonds do not affect owners control.
o It a ows irms to trade on the equlty.
o Bonds pay perodic Interest and the repayment of parva ue at maturity
o Bonds can Increase return on equity.
