Which of the Following Is Not True of Bonds Issued

question 174

Multiple Choice

Which of the following is not true of bonds issued at a premium?

• A)The cash proceeds exceed the face amount of the bonds.
• B)The amortization of bond premium decreases the interest expense.
• C)The amount of the Premium on Bonds Payable account is subtracted from the face amount of the bonds to determine the net liability reported in the balance sheet.
• D)The market rate was below the coupon rate.
• E)Amortization of the premium decreases the carrying value of the bond.

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Definitions:

Interest Groups

Parties or organizations other than direct competitors that have some vested interest in how an organization is managed.

Organizational Effectiveness

A measure of how successfully an organization achieves its goals and objectives.

Resource Dependency

A theory that suggests organizations depend on resources in their environment to survive, which influences their behavior and strategies.

Environmental Uncertainty

The extent to which an organization lacks information about its external environment, making it difficult to predict future events or trends.