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.

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A unit of data measurement equal to approximately one million bytes, often used to measure file size or storage capacity.

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A basic unit of digital information in computing and telecommunications, typically consisting of 8 bits.

Kilobyte

A unit of digital information that consists of 1,024 bytes, commonly used to measure storage capacity and data.

Bytes

A unit of digital information that typically consists of eight bits, commonly used to encode a single character of text in a computer.