Under the effective-interest method of amortizing a bond premium, the interest expense recorded for each semi-annual interest payment:
A) will equal the amount of cash paid for each semi-annual interest payment
B) will decrease over the life of the bond
C) is at a different percentage of the bond's carrying value for every interest payment
D) will increase over the life of the bond
Correct Answer:
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Q1: A $1,500 bond quoted at
A) $1,518
B) $1,492
C)
Q2: A $10,000 bond quoted at
A) $9,897
B) $9,662
C)
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