Question
Which of the following statements correctly describes the accounting for bonds that were issued at a premium? A. The book value of the bond liability
Which of the following statements correctly describes the accounting for bonds that were issued at a premium?
A. The book value of the bond liability increases when interest payments are made on the due dates when the effective interest method of amortization is used.
B. The interest expense over the life of the bonds increases as the bonds mature when the effective interest method is used.
C. The amount of amortization of the premium on bonds payable decreases as the bonds mature when the effective interest method is used.
D. The interest expense over the life of the bond is less than the total cash interest payments.
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