When a Bond Payable Is Issued at a Premium,subsequent Amortization

question 43

Multiple Choice

When a bond payable is issued at a premium,subsequent amortization of the premium does which of the following?

• A)Increase interest expense.
• B)Decrease the book value of the bonds.
• C)Decrease in amount amortized for each year the bond gets older when the effective-interest method is used.
• D)Decrease the amount reported as a cash flow from operating activities.

---

Definitions:

Health

A state of complete physical and mental or social well-being.

Well-Being

A state of being comfortable, healthy, or happy, encompassing physical, mental, and emotional health.

Chemical Additives

Substances added to products to enhance or preserve their properties, such as flavor, color, or shelf life.

Shelf Life

That length of time that sterile items are given before they are considered unsuitable for maintaining sterility.