Bond interest paid is equal to the
a. face amount of the bonds multiplied by the stated interest rate.
b. carrying value of the bonds multiplied by the effective interest rate.
c. face amount of the bonds multiplied by the effective interest rate.
d. carrying value of the bonds multiplied by the stated interest rate.

Question

Bond interest paid is equal to the
a. face amount of the bonds multiplied by the stated interest rate.
b. carrying value of the bonds multiplied by the effective interest rate.
c. face amount of the bonds multiplied by the effective interest rate.
d. carrying value of the bonds multiplied by the stated interest rate.

Dang · Accepted Answer

a. face amount of the bonds multiplied by the stated interest rate.
The interest payable on a bond is calculated by multiplying the face value of the bond with the stated rate of interest.
For example, A 8%bond has a face value of $100.
This implies that the interest is 8%*100
                                            = $8

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