The Contractual interest rate is always stated as A) monthly rate. B) daily rate. C) semiannual rate. D) annual rate. Premium on Bonds Payable A) has a debit balance. B) is a contra-asset account. C) is considered to be a reduction in the cost of borrowing. D) is deducted from bonds payable on the balance sheet. If bonds are issued at a discount, it means that the A) financial strength of the issuer is suspect. B) market interest rate is higher than the contractual interest rate. C) market interest rate is lower than the contractual interest rate. D) bondholder will receive effectively less interest than the contractual A $100,000 bond issue with a carrying value of $103,000 is called at 101 Which of the following statements is true? A) A loss of $2,000 is recorded. B) A gain of $2,000 is recorded. C) A loss of $3,000 is recorded. D) No gain or loss is recorded