Question

Which of the following statements about the issuance of bonds at a premium is not correct?

A) The Premium on Bonds Payable account is amortized each year and reduces the companys annual Interest Expense.

B) On the date of issuance, the stated interest rate was greater than the market interest rate.

C) As the current date approaches the maturity date, the carrying value of the bond approaches the face value of the bond.

D) The account used to record the premium has a normal debit balance.

Answer

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