Question

When bonds are issued at a premium, the interest rate used to calculate interest expense will...

When bonds are issued at a premium, the

interest rate used to calculate interest expense will be the contractual rate.

amortized cost of the bonds will increase with successive amortization.

interest paid to bondholders will increase after each interest payment date.

amount of premium amortized will get larger with successive amortization.
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Answer #1
When bonds are issued at a premium, the amount of premium amortized will get larger with successive amortization.
Interest rate used to calculate interest expense will be the market interest rate
Amortized cost of the bonds will decrease with successive amortization.
Interest paid to bondholders will be constant at each interest payment date.
The carrying value of bonds and interest expense will decrease, as a result amount of premium amortized will increase after each interest payment date.
Option D is correct
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