Final answer:
The nature of the book-tax difference is temporary and favorable. correct option is a.
Step-by-step explanation:
The nature of the book-tax difference relating to the $3,000 interest expense paid by iScope Inc. on the loan used to purchase municipal bonds is a. Temporary; favorable.
The interest paid on the loan is deductible for tax purposes, resulting in a lower taxable income for iScope Inc. This creates a temporary difference between the reported financial statement expense and the expense used for tax purposes. Since the tax deduction reduces the tax liability of iScope Inc., it is considered a favorable difference.