On November 1,2009,Davis Company Issued $30,000,ten-Year,7% Bonds for $29,100

Multiple Choice

On November 1,2009,Davis Company issued $30,000,ten-year,7% bonds for $29,100.The bonds were dated November 1,2009,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.