6. If bonds are issued at a premium, the stated interest rate is A) higher than the market rate of interest, B) lower than the market rate of interest. C) too low to attract investors. D) adjusted to a higher rate of interest. 7. The term deficit is used to refer to a debit balance in which of the following accounts of a corporation? A) Treasury Shares B) Retained Earnings C) Organizational Expenses D) Ordinary Shares 8. Dylan Corporation issues for cash $2,000,000 of 8%, 15-year bonds, interest payable annually, at a time when the market rate of interest is 9%. The straight-line method is adopted for the amortization of bond discount or premium. Which of the following statements is true? A) The carrying amount decreases from its amount at issuance date to $2,000,000 at maturity B) The amount of annual interest expense decreases as the bonds approach maturity. C) The amount of annual interest paid to bondholders remains the same over the life of the bonds. D) The amount of annual interest paid to bondholders increases over the 15-year life of the bonds. 9. If $2,000,000 principal amount of 10% bonds are issued at $97, cash received from the issue of bonds amounts to A) $200,000 B) $1,000,000 C) $1,100,000. D) $1,940,000 10. Franklin Corporation issues $50,000, 10%, 5-year bonds on January 1, 2018, for $52,100. Interest is paid semiannually on January 1 and July 1. If Franklin uses the straight-line method of amortization of bond discount or premium, the amount of bond interest expense to be recognized on July 1, 2018 is A) $2,290 B) $2,500 C) $2,710 D) $10,290