When a Bond Payable Is Issued at a Premium, Subsequent

Multiple Choice

When a bond payable is issued at a premium, subsequent amortization of the premium does which of the following?

A) Increases interest expense.
B) Decreases the book value of the bonds.
C) The amortization for each year the bond approaches maturity, when the effective-interest method is used, would decrease.
D) Decreases the amount reported as a cash flow from operating activities.