Bonds
josh
September 22, 2015
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Question
An issuer of 2 years maturity bonds with a $100 face value providing a 4% coupon rate paid every six months was issued with a premium of $4.
The payment by the issuer of one coupon combined with the amortization of the premium over the life of the bond results in
A.
a decrease in retained profits by $3.
B.
a decrease in retained profits by $4.
C.
a decrease in retained profits by $1.
D.
a decrease in retained profits by $8.
