Tony Hawk's Adventure (THA) issued callable bonds on January 1, 2012. THA's accountant has projected the following amortization schedule from issuance until maturity:
$\begin{array}{llccc}
& \text { Cash } & \text { Interest } & \text { Increase in } & \text { Carrying } \
\text { Date } & \text { Paid } & \text { Expense } & \text { Carrying Value } & \text { Value }\1 / 1 / 12 & & & & \$ 194,758 \
6 / 30 / 12 & \$ 7,000 & \$ 7,790 & \$ 790 & 195,548 \
12 / 31 / 12 & 7,000 & 7,822 & 822 & 196,370\6 / 30 / 13 & 7,000 & 7,855 & 855 & 197,225 \
12 / 31 / 13 & 7,000 & 7,889 & 889 & 198,114 \
6 / 30 / 14 & 7,000 & 7,925 & 925 & 199,039 \
12 / 31 / 14 & 7,000 & 7,961 & 961 & 200,000
\end{array}$
-THA issued the bonds:

Question

Tony Hawk's Adventure (THA) issued callable bonds on January 1, 2012. THA's accountant has projected the following amortization schedule from issuance until maturity:
$\begin{array}{llccc} 
& \text { Cash } & \text { Interest } & \text { Increase in } & \text { Carrying } \
\text { Date } & \text { Paid } & \text { Expense } & \text { Carrying Value } & \text { Value }\1 / 1 / 12 & & & & \$ 194,758 \
6 / 30 / 12 & \$ 7,000 & \$ 7,790 & \$ 790 & 195,548 \
12 / 31 / 12 & 7,000 & 7,822 & 822 & 196,370\6 / 30 / 13 & 7,000 & 7,855 & 855 & 197,225 \
12 / 31 / 13 & 7,000 & 7,889 & 889 & 198,114 \
6 / 30 / 14 & 7,000 & 7,925 & 925 & 199,039 \
12 / 31 / 14 & 7,000 & 7,961 & 961 & 200,000
\end{array}$
-THA issued the bonds:

Quizplus · Accepted Answer

The carrying value of the bonds is increasing over time, indicating that the bonds were issued at a discount.

Tony Hawk's Adventure (THA) Issued Callable Bonds on January 1