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Find payments on time the bond outstanding until maturity

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Reference no: EM132518101

Bonds and long-term notes

Question 1: AAM Office Equip has issued $100,000,000 of bonds. They mature in 15 years and have a 7% coupon rate. When issued, the market rate for similar bonds was 8.75%. Assume this caused the bonds to be sold for $91,000,000. AAM amortizes and premiums and discounts on bonds using the straight line method. The bond pays interest annually with principle due at maturity. Total interest expense, assuming all payments on time the bond outstanding until maturity, will be

Option A $ 105,000,000

Option B $ 96,000,000

Option C $ 114,000,000

Option D $ 219,000,000

Option E $ 214,000,000

Reference no: EM132518101

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