When the Interest Payment Dates of a Bond Are May

question 46

Multiple Choice

When the interest payment dates of a bond are May 31 and November 30,and a bond issue is sold on July 1,the amount of cash received by the issuer will be:

• A) Decreased by accrued interest from July 1 to November 30.
• B) Decreased by accrued interest from May 31 to July 1.
• C) Increased by accrued interest from May 31 to July 1.
• D) Increased by accrued interest from July 1 to November 30.
• E) Unaffected by accrued interest.