Which of the following statements doesn't correctly describe the accounting for bonds that were issued at their maturity value?
A)The market rate of interest equals the stated interest rate.
B)The interest expense over the life of the bonds will equal the cash interest payments.
C)The present value of the bonds' future cash flows equals the bonds' maturity value.
D)The book value of the bond liability decreases when interest payments are made on the due dates.

Question

Quizplus · Accepted Answer

The payment of interest expense on the due date results in a decrease in assets and an increase in interest expense.

Which of the Following Statements Doesn't Correctly Describe the Accounting