Parker Company issued ten-year, 9%, bonds payable in 2017 at a premium. During 2017, the company's accountant failed to amortize any of the bond premium. The omission of the premium amortization will
A)not affect net income for 2017.
B)cause retained earnings at the end of 2017 to be overstated.
C)cause net income for 2017 to be overstated.
D)cause net income for 2017 to be understated.

Question

Quizplus · Accepted Answer

The Answer of Parker Company issued ten-year, 9%, bonds payable in 2017 at a premium. During 2017, the company's accountant failed to amortize any of the bond premium. The omission of the premium amortization will
A)not affect net income for 2017.
B)cause retained earnings at the end of 2017 to be overstated.
C)cause net income for 2017 to be overstated.
D)cause net income for 2017 to be understated.

Parker Company Issued Ten-Year, 9%, Bonds Payable in 2017 at a Premium