The territorial approach, also referred to as the source approach to tax policy, levies taxes on the income earned by firms that are incorporated in the host country, regardless of where the income was earned (domestically or abroad). a. True
b. False

At the beginning of 2017, the octo company issued 10% bonds with a face value of $3,000,000. these bonds mature in the five years, and interest is paid semiannually on june 30 and december 31. the bonds were sold for $2,779,200 to yield 12%. octo uses a calendar-year reporting period. using the effective-interest method of amortization, amount of interest expense that should be reported for 2017 is