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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