If bonds have been issued at a premium,over the life of the bonds,the:
A)carrying value of the bonds will decrease.
B)carrying value of the bonds will increase.
C)interest expense will increase.
D)interest payment will increase.

Question

Quizplus · Accepted Answer

If bonds have been issued at a premium, it means that the price paid for the bonds was higher than their face value. Over the life of the bonds, the company will amortize the premium which means it will reduce the carrying value of the bonds. As a result, the carrying value of the bonds will decrease over time.

If Bonds Have Been Issued at a Premium,over the Life