Parker Company Issued Ten-Year, 9%, Bonds Payable in 2014 at a Premium

Multiple Choice

Parker Company issued ten-year, 9%, bonds payable in 2014 at a premium. During 2014, the company's accountant failed to amortize any of the bond premium. The omission of the premium amortization will

A) not affect net income for 2014.
B) cause retained earnings at the end of 2014 to be overstated.
C) cause net income for 2014 to be overstated.
D) cause net income for 2014 to be understated.