Which of the Following Statements Regarding Amortization Is True

question 8

Multiple Choice

Which of the following statements regarding amortization is true?

• A)Amortization of the premium causes the Premium on Bonds Payable account to increase.
• B)Amortization of the premium causes the amount of interest expense to increase.
• C)Cash interest payments on bonds equals interest expense on the income statement when there is amortization of a bond premium.
• D)Amortization of a premium continues over the life of the bond until the balance in the account is reduced to zero.

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