On November 1, 2013, Davis Company Issued $30,000, Ten-Year, 7

Multiple Choice

On November 1, 2013, Davis Company issued $30,000, ten-year, 7% bonds for $29,100. The bonds were dated November 1, 2013, and interest is payable each November 1 and May 1. Which of the following is incorrect assuming the straight-line method of amortization is utilized?

A) The market rate of interest exceeded the stated rate of interest when the bonds were issued.
B) The semi-annual interest expense is $1,095.
C) The book value of the bonds increases $45 every six months.
D) The semi-annual interest expense is less than the semi-annual cash interest payment.