If Bonds Have Been Issued at a Discount and the Effective-Interest

question 119

Multiple Choice

If bonds have been issued at a discount and the effective-interest method is used,the ________ over the life of the bonds.

• A)carrying value of the bonds will decrease
• B)interest payment will increase
• C)interest expense will decrease
• D)interest expense will increase

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Definitions:

Authority

The power or right to give orders, make decisions, and enforce obedience.

Liable

Being legally responsible for something, typically referring to the obligation to compensate for loss or damage.

Disclosed Principal

A principal whose identity is known to a third party at the time the agent makes a contract with the third party.

Liable

Legally responsible or obligated, often in reference to the duty to compensate for harm or loss caused by one's actions or omissions.