In its 2013 income statement, WME reported $11,000 of interest expense on its outstanding bonds. During the year, WME paid its regular installments of $9,000 of interest in cash. In its reconciliation schedule, WME should:
A)Show a $2,000 positive adjustment to net income under the indirect method for the decrease in bond premium.
B)Show a $2,000 negative adjustment to net income under the indirect method for the decrease in bond premium.
C)Show a $2,000 positive adjustment to net income under the indirect method for the decrease in bond discount.
D)Show a $2,000 negative adjustment to net income under the indirect method for the decrease in bond discount.

Question

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The Answer of In its 2013 income statement, WME reported $11,000 of interest expense on its outstanding bonds. During the year, WME paid its regular installments of $9,000 of interest in cash. In its reconciliation schedule, WME should:
A)Show a $2,000 positive adjustment to net income under the indirect method for the decrease in bond premium.
B)Show a $2,000 negative adjustment to net income under the indirect method for the decrease in bond premium.
C)Show a $2,000 positive adjustment to net income under the indirect method for the decrease in bond discount.
D)Show a $2,000 negative adjustment to net income under the indirect method for the decrease in bond discount.

In Its 2013 Income Statement, WME Reported $11,000 of Interest