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17. Under the effective-interest method of amortization, interest calculated by multiplying the: expense each period can be b. beginning net liabil liability times the coupon interest rate for the appropriate time period het Iliability times the effective interest rate for the appropriate time period Value of the bonds times the effective interest rate for the appropriate time period. d. face value of the bonds times the coupon interest rate for the appropriaste time 18. Eaton Company issued S5 million in bonds. The stated (coupon) rate of interest was 1 and the market rate l 1%. Which ofthe following statements is a. The bonds were issued at a premium. e. d. Annual interest expense will exceed the company's actual coupon payments Annual interest expense will be $500,000. The net book value of the bonds will be decreased as the periodic coupon payments are made. 19. Which of the following is tnue of bonds issued at a premium? cash proceeds from issuing the bonds are below the face amount of the bonds b. The inte erest expense recorded on Income Statement is lower than the coupon payment. The market rate was higher than the coupon rate. c. d. Amortization increases the carrying value of the bond. 20. Which statement is true? discount. premium. a. If a bond is sold at a price that is greater than face value, it is said to be sold at a b. If a bond is sold at a price that is less than face value, it is said to be sold at a c. The periodic cash payment to a bondholder is based upon the market rate of interest. d. The coupon rate and the market interest rate are usually different on the date the bond is issued