A bond with a stated interest rate of 8% and a market rate of 7% was issued at a price reflecting the market interest rate. As the bond matures:
A) the Discount on Bonds Payable decreases.
B) the Premium on Bonds Payable decreases.
C) the Premium on Bonds Payable increases.
D) the Discount on Bonds Payable increases.
Correct Answer:
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