Which of the Following Statements Incorrectly Describes the Accounting for Bonds

question 68

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 stated 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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Definitions:

Transportation Infrastructure

The foundational facilities and systems serving a country, city, or area, including roads, bridges, tunnels, railways, and ports, used for the movement of people and goods.

Investment Decisions

The process of making choices about where to allocate resources in order to generate the highest possible returns.

Carrier

A carrier is an entity that undertakes the transportation of goods or passengers from one place to another, including airlines, shipping lines, and trucking companies.

Fastest Delivery

Refers to the logistic and supply chain capability to deliver products or services to customers in the shortest possible time.