Restoration Company Issued Bonds That Had the Following Data Associated

question 160

Multiple Choice

Restoration Company issued bonds that had the following data associated with them: Interest to be paid is $40,000.
Interest expense to be recorded is $45,000.
Which of the following characteristics is true?

• A)The bonds are sold at a premium.
• B)When recording the interest expense, the amortization will decrease the bond carrying value.
• C)The difference between the interest expense and the interest to be paid is the bond's par value.
• D)When recording the interest expense, the amortization will increase the bond carrying value.

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