Using straight-line amortization,when a bond is sold at a premium:
A)the amortized premium is added to the interest payable to calculate interest expense.
B)Bonds Payable rises by a constant amount each year.
C)interest expense is calculated by subtracting the amortized premium from the interest payment that is to be made.
D)interest expense rises each year.

Question

Quizplus · Accepted Answer

Using straight-line amortization,the bond premium is allocated evenly over the bond's life and is subtracted from the interest payment to calculate the interest expense.The interest expense is a constant amount each year.

Using Straight-Line Amortization,when a Bond Is Sold at a Premium