Bond issue costs have the effect of
A) decreasing the face value of the bond.
B) increasing a bond premium.
C) decreasing the effective interest rate.
D) increasing a bond discount.

Name: Bond issue costs have the effect of A) decreasing the face value of the bond. B) increasing a bond premium. C) decreasing the effective interest rate. D) increasing a bond discount.
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Question

Quizplus · Accepted Answer

Bond issue costs are treated as a reduction in the proceeds from the bond issuance, effectively increasing the bond discount.

Bond Issue Costs Have the Effect of