Question

On the maturity date of bonds issued at a premium: A) the Premium on Bonds Payable...

On the maturity date of bonds issued at a premium: A) the Premium on Bonds Payable account is zero B) the carrying value of the bonds is greater than face value C) the carrying value of the bonds is less than face value D) both a and b are correct

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Answer #1

Correct answer is A

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When the issue price is more than the face value of the bond then the bond is issued at premium.

The premium amount is amortize annually and at the maturity of the bond premium will be equal to zero.

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