Using Straight-Line Amortization,when a Bond Is Sold at a Premium

question 231

Multiple Choice

Using straight-line amortization,when a bond is sold at a premium:

• A)the amortized premium is added to the interest payable to calculate interest expense.
• B)Bonds Payable rises by a constant amount each year.
• C)interest expense is calculated by subtracting the amortized premium from the interest payment that is to be made.
• D)interest expense rises each year.

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Definitions:

Hypothetical-Deductive Reasoning

Piaget’s formal operational concept that adolescents have the cognitive ability to develop hypotheses about ways to solve problems and can systematically deduce which is the best path to follow in solving the problem.

Formal Operations

The stage in Piaget's theory of cognitive development where abstract and logical thinking is developed, usually during adolescence.

Formal-Operational Thought

A stage in Piaget’s theory of cognitive development where individuals gain the ability to think abstractly and logically.

Trial-And-Error

A method of solving problems through repeated, varied attempts until success or an optimal solution is found.