If Bonds Have Been Issued at a Discount, Then Over

question 68

Multiple Choice

If bonds have been issued at a discount, then over the life of the bonds the

• A) carrying amount of the bonds will increase.
• B) interest expense will decrease.
• C) unamortized discount will increase.
• D) carrying amount of the bonds will decrease.

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Definitions:

Foreign Investors

Individuals or entities from one country investing in the assets or businesses of another country.

Mutual Mistake

An error shared by all parties to a contract, possibly making the agreement voidable.

Unilateral Mistake

A situation where only one party to an agreement is mistaken about a basic assumption on which the contract is made.

Equity

The value of ownership interest in property, including shareholders' equity in a corporation, minus liabilities and debts.