The Amortization of a Premium on Bonds Payable

question 73

Multiple Choice

The amortization of a premium on bonds payable:

• A)decreases the carrying value of the bonds
• B)increases the amount of interest expense recorded for the bonds
• C)decreases the amount of cash paid at the interest date
• D)has no effect on the amount of interest expense recorded for the bonds

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Definitions:

Business Venture

An entrepreneurial endeavour or enterprise that is newly formed with the aim of gaining profit.