For the issuer of 20-year bonds, the carrying value using the effective interest method would decrease each year if the bonds were sold at a: $$\begin{array}{l}
\text { }\
\begin{array} { c c c }
&\text { Discount } & \text { Premium } \
\hline a.&\text { No } & \text { No } \
b.&\text { No } & \text { Yes } \
c.&\text { Yes } & \text { Yes } \
d.&\text { Yes } & \text { No }
\end{array}
\end{array}$$

Question

For the issuer of 20-year bonds, the carrying value using the effective interest method would decrease each year if the bonds were sold at a: $$\begin{array}{l}
\text { }\
\begin{array} { c c c } 
&\text { Discount } & \text { Premium } \
\hline  a.&\text { No } & \text { No } \
b.&\text { No } & \text { Yes } \
c.&\text { Yes } & \text { Yes } \
d.&\text { Yes } & \text { No }
\end{array}
\end{array}$$

Quizplus · Accepted Answer

The carrying value of bonds sold at a premium decreases each year as the premium is amortized over the life of the bond using the effective interest method.

For the Issuer of 20-Year Bonds, the Carrying Value Using