1. Assuming that a bond is originally issued at a premium, the carrying value of the bond liability will decrease over the life of the bond. This statement is

True or False

2.On January 1, Year 1 Residence Company issued bonds with a $50,000 face value. The bonds were issued at 96 resulting in a 4% discount. They had a 20 year term and a stated rate of interest of 7%. Based on this information, the carrying value of the bond liability on January 1, Year 1 is

Multiple Choice

• $52,000.

• $50,000.

• $48,000.

• $46,500.