If interest expense is equal to the contractual interest payment, then
A)the note was issued at a premium.
B)the note was issued at a discount.
C)the note was issued at par.
D)It cannot be determined from the information given.

Question

Quizplus · Accepted Answer

If interest expense is equal to the contractual interest payment, it means that there was no premium nor discount on the note. This implies that the note was issued at its par value.

If Interest Expense Is Equal to the Contractual Interest Payment