1) On the maturity date of bonds issued at a premium:

A) the Premium on Bonds Payable account is zero

B) the carrying value of the bonds is greater than face value

C) the carrying value of the bonds is less than face value

D) both a and b are correct

2) Why would a lessee rather have an operating lease than a capital lease?

A) operating leases do not require reporting long-term liabilities.

B) capital leases would require larger lease payments

C) operating leases permit a tax deduction for depreciation

D) noncancelable operating leases involve less risk

3) What would happen if a firm fails to record the amortization of premium on bonds payable?

A) interest payments would be understated

B) interest payments would be overstated

C) interest expense would be understated

D) interest expense would be overstated