You Graphed the Carrying Value and Par Value Over the Life

question 7

Multiple Choice

You graphed the carrying value and par value over the life of a bond.You noticed that the carrying value is above the par value line and that the two lines meet over time.Identify the statement below that is best described by the graph you drew.

• A)The bond was issued at a premium
• B)Discounted interest amortization is used
• C)The bond was issued at a discount
• D)Effective interest amortization is used
• E)The bond was issued at par