Which of the Following Statements About the Issuance of Bonds

question 37

Multiple Choice

Which of the following statements about the issuance of bonds at a premium is not correct?

• A)The Premium on Bonds Payable account is amortized each year and reduces the company's annual Interest Expense.
• B)On the date of issuance,the stated interest rate was greater than the market interest rate.
• C)As the current date approaches the maturity date,the carrying value of the bond approaches the face value of the bond.
• D)The account used to record the premium has a normal debit balance.