Using the Effective Interest Rate Method to Amortize Bond Premium

question 37

Multiple Choice

Using the effective interest rate method to amortize bond premium will

• A) cause the carrying value of the bond to increase as it approaches the maturity date.
• B) cause the carrying value of the bond to decrease as it approaches the maturity date.
• C) cause the carrying value to be the same as the issue price.
• D) not change the carrying value.

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Definitions:

Homicide

The act of one human killing another, whether lawfully, as in self-defense, or unlawfully.

Alcohol Consumption

involves drinking alcoholic beverages and can range from moderate drinking to heavy and binge drinking.

Cirrhosis

A late stage of scarring (fibrosis) of the liver caused by many forms of liver diseases and conditions, such as hepatitis and chronic alcoholism.

Unintentional Injuries

Physical harm or damage that occurs without the intent to injure, often resulting from accidents, falls, or mishaps.