Which of the Following Statements Incorrectly Describes the Accounting for Bonds

question 58

Multiple Choice

Which of the following statements incorrectly describes the accounting for bonds that were issued at a premium?

• A)The market rate of interest is less than the coupon interest rate.
• B)The interest expense over the life of the bonds will be less than the cash interest payments.
• C)The present value of the bonds' future cash flows is less than the bonds' maturity value.
• D)The book value of the bond liability decreases when interest payments are made on the due dates.

---

Definitions:

Social Software

Computer programs that enable users to interact and share data with each other online, such as social networking sites.

Endorses Timex

The act of publicly supporting, recommending, or approving of Timex, often done by a famous person or influencer as part of a marketing strategy.

Influence Tactic

involves strategies or actions employed to sway or alter another person's beliefs, attitudes, or behaviors towards a desired outcome.

Bounded Rationality

A concept in decision making that recognizes the limitations of human cognition and information processing, suggesting that individuals are "rationally bounded" to making decisions based on the limited information they have and their finite cognitive capacity.