A Bond with a Stated Interest Rate of 8% and a Market

Multiple Choice

A bond with a stated interest rate of 8% and a market rate of 7% was issued at a price reflecting the market interest rate. As the bond matures:

A) the Premium on Bonds Payable decreases.
B) the Discount on Bonds Payable decreases.
C) the Premium on Bonds Payable increases.
D) the Discount on Bonds Payable increases.