Relationships The following components are computed annually when a bond is issued for other than its face value:

• Cash interest payment

• Interest expense

• Amortization of discount/premium

• Carrying value of bond Required State whether each component will increase (I), decrease (D), or remain constant (C) as the bond approaches maturity given the following situations:

1. Issued at a discount 2. Issued at a premium AppendixLO1