Which of the following statements is correct?
A)Amortization of discount on bonds payable (bond discount)results in an increase in a bond's carrying value.
B)Amortization of discount on bonds payable (bond discount)results in a decrease in bond interest expense.
C)Amortization of premium on bonds payable (bond premium)results in an increase in a bond's carrying value.
D)Amortization of premium on bonds payable (bond premium)results in an increase in bond interest expense.

Question

Quizplus · Accepted Answer

Amortization of discount on bonds payable increases the carrying value of the bond over time, as the discount is gradually added to the bond's book value until it reaches its face value at maturity.

Which of the Following Statements Is Correct