When a bond payable is issued at a discount,which of the following would not occur as the bond is amortized each year?
A)Interest expense would increase.
B)The book value of the bonds would increase.
C)When the effective-interest method is used,the discount amortization for each year the bond approaches maturity would increase.
D)The amount of amortization would be subtracted from net income to arrive at cash flows from operating activities.

Question

Quizplus · Accepted Answer

The amount of amortization is added back to net income in the operating activities section of the cash flow statement, not subtracted.

When a Bond Payable Is Issued at a Discount,which of the Following