How would the carrying value of bonds payable change over time for bonds issued at a $$\begin{array} { l c c }
& \underline { \text { Discount } } & \underline { \text { Premium } } \
\text { a. } & \text { No effect } & \text { No effect } \
\text { b. } & \text { No effect } & \text { Increase } \
\text { c. } & \text { Increase } & \text { Decrease } \
\text { d. } & \text { Decrease } & \text { Increase }
\end{array}$$

Question

How would the carrying value of bonds payable change over time for bonds issued at a $$\begin{array} { l c c } 
& \underline { \text { Discount } } & \underline { \text { Premium } } \
\text { a. } & \text { No effect } & \text { No effect } \
\text { b. } & \text { No effect } & \text { Increase } \
\text { c. } & \text { Increase } & \text { Decrease } \
\text { d. } & \text { Decrease } & \text { Increase }
\end{array}$$

Quizplus · Accepted Answer

For bonds issued at a discount, the carrying value increases over time as the discount is amortized. For bonds issued at a premium, the carrying value decreases over time as the premium is amortized.

How Would the Carrying Value of Bonds Payable Change Over