A corporation issued the following bonds during 2020: 

issue face value stated interest rate market int rate proceeds of the issue date of the issue maturity date 

bond #11,000,000 3.0%5%963,000  1-Mar-2028-Feb-23

bond #21,000,000 4.0%5%981,000 1-Mar-2028-Feb-23 

bond #31,000,000 5.0%5%1,000,000 1-Mar-2028-Feb-23 

bond #41,000,000 6.0%5%1,019,000 1-Mar-2028-Feb-23 

bond #51,000,000 7.0%5%1,037,000 1-Mar-2028-Feb-23 

Assume that all interest payments are made once a year - on February 28 - and that all bonds were paid off at the maturity date. 

What effect did these bonds have on the corporation's taxable income in each of the years 2020, 2021, and 2022?

Answer rating: 100% (QA)

The corporation s taxable income would be increased by the amount of interest paid on the bonds in e... View the full answer