Which of the Following Statements Correctly Describes the Accounting for Bonds

Multiple Choice

Which of the following statements correctly describes the accounting for bonds that were issued at a premium?

A) The interest expense over the life of the bond is less than the cash interest payments.
B) The interest expense over the life of the bonds increases as the bonds mature when the effective interest method is used.
C) The amortization of the premium on bonds payable account decreases as the bonds mature when the effective interest method is used.
D) The book value of the bond liability increases when interest payments are made on the due dates when the effective interest method of amortization is used.