For the issuer of 20-year bonds,the carrying value using the effective interest method would decrease each year if the bonds were sold at a:
$$\begin{array}{l}
\begin{array} { c c }
&\text { Discount } & \text { Premium } \
a.&\text { No } & \text { No } \
b.&\text { No } & \text { Yes } \
c.&\text { Yes } & \text { Yes } \
d.&\text { Yes } & \text { No }
\end{array}
\end{array}$$

Question

For the issuer of 20-year bonds,the carrying value using the effective interest method would decrease each year if the bonds were sold at a:
$$\begin{array}{l}
\begin{array} { c c } 
&\text { Discount } & \text { Premium } \
a.&\text { No } & \text { No } \
b.&\text { No } & \text { Yes } \
c.&\text { Yes } & \text { Yes } \
d.&\text { Yes } & \text { No }
\end{array}
\end{array}$$

Quizplus · Accepted Answer

When bonds are sold at a premium, the carrying value decreases over time as the premium is amortized.

For the Issuer of 20-Year Bonds,the Carrying Value Using the Effective