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On November 1, 2015, Davis Company issued $32,100, ten-year, 7% bonds for $30,150. The bonds were dated November 1, 2015, and interest is payable each
On November 1, 2015, Davis Company issued $32,100, ten-year, 7% bonds for $30,150. The bonds were dated November 1, 2015, and interest is payable each on May 1 and November 1. Davis uses the straight-line method of amortization. Which of the following is incorrect with regard to the Davis bonds when the straight-line method of amortization is utilized? The book value of the bonds increases by $97.50 every six months O The semi-annual interest expense is less than the semi-annual cash interest payment. O The semi-annual interest expense is $1,221. 0 The market rate of interest exceeded the coupon rate of interest when the bonds were issued
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