When a Bond Is Issued at a Price Higher Than

question 45

Multiple Choice

When a bond is issued at a price higher than the face value,the difference is known as a ________.

• A) premium
• B) discount
• C) maturity value
• D) face value

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Definitions:

Liabilities

Financial obligations or debts that a business owes to external parties.

Owner's Equity

The residual interest in the assets of a business after deducting liabilities, representing the owner's claim against the company's assets.

Ratio

A quantitative relationship between two numbers, showing how many times one value is contained within another.

Liabilities

Financial obligations or debts that a business owes to others, which must be paid back in the future.