Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 52

For the following questions, circle the best response.

The carrying value of a bond in the liability section of the balance sheet will

a. increase over time as the Premium on Bonds Payable account is amortized.

b. increase over time as a bond issued at a discount reaches maturity.

c. increase over time as a bond issued at par reaches maturity.

d. decrease over time as the Discount on Bonds Payable account is amortized.

e. increase over time as Interest Expense on the bond is accrued each year.

Step 1 of 6

(a)

The carrying value of a bond in the liability section of the balance sheet will not increase over time as the Premium Bonds Payable account is amortized.