Question

The annual interest payment on bonds:

A) increases over the life of the bonds when bonds are issued at a discount.

B) decreases over the life of the bonds when bonds are issued at a discount.

C) stays constant over the life of the bonds, regardless of whether bonds are issued at par, a discount, or a premium.

D) increases over the life of the bonds under the effective-interest method, but stays constant under the straight-line method of amortization.

Answer

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