If bonds are issued at a premium, the carrying amount of the bonds will be greater than the face amount of the bonds for all periods prior to the bond maturity date.

Question

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When bonds are issued at a premium, it means that their selling price is higher than their face amount. As a result, the carrying amount of the bonds will be greater than their face amount for all periods prior to maturity, as the premium will be amortized over the life of the bond.

If Bonds Are Issued at a Premium, the Carrying Amount