When a bond sells at a discount, the carrying value ________ after each amortization entry.

1. increases
2. decreases
3. stays the same
4. cannot be determined

   The cash interest payment a corporation makes to its bondholders is based on ________.

5. the market rate times the carrying value
6. the stated rate times the principal
7. the stated rate times the carrying value
8. the market rate times the principal