Asked by Meagan Silver on Apr 28, 2024
Verified
Which of the following statements is true?
A) Interest on bonds is tax deductible.
B) Interest on bonds is not tax deductible.
C) Dividends to stockholders are tax deductible.
D) Bonds do not have to be repaid.
E) Bonds always increase return on equity.
Tax Deductible
Expenses or payments that can be subtracted from gross income to reduce the amount of income subject to tax.
Bonds
Long-term securities issued by corporations, municipalities, or governments to raise funds, paying interest to holders.
- Grasp the tax implications of bond interest and the effect on company financial statements.
Verified Answer
ZK
Zybrea KnightMay 02, 2024
Final Answer :
A
Explanation :
Interest on bonds is tax deductible for the issuing corporation, which can reduce the company's taxable income.
Learning Objectives
- Grasp the tax implications of bond interest and the effect on company financial statements.