Answer the following statements true (T) or false (F)
1. Premium on Bonds Payable is additional Interest Expense of the company that issues the bond.
2. When a bond is matured, the carrying value always equals the face value.
3. The main reason companies retire bonds prior to their maturity date is to relieve the pressure of paying interest payments.
4. An alternative to calling the bonds is to purchase any available bonds in the open market at their current market price.
5. Callable bonds are bonds that the issuer may call and pay off at a specified price whenever the issuer wants.
1. FALSE - Explanation: The premium is like a saving of interest expense.
2. TRUE
3. TRUE
4. TRUE
5. TRUE
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