When a Bond Payable Is Issued at a Premium, Subsequent

question 60

Multiple Choice

When a bond payable is issued at a premium, subsequent amortization of the premium does which of the following?

• A)Increases interest expense.
• B)Decreases the book value of the bonds.
• C)The amortization for each year the bond approaches maturity, when the effective-interest method is used, would decrease.
• D)Decreases the amount reported as a cash flow from operating activities.

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Definitions:

Rapid-Acting Insulin

A type of insulin that starts to work shortly after injection and is used to control blood sugar levels during meals.

Sliding Scale

A method used to adjust the dose of a medication, such as insulin, based on specific variables, typically blood sugar levels.

ADE (Adverse Drug Event)

A harmful or unpleasant reaction that results from taking a medication as prescribed or by error.