Which of the Following Statements Is True When Bonds Are

Multiple Choice

Which of the following statements is true when bonds are issued at a premium?

A) The carrying value decreases by equal amounts each year if straight-line amortization is used.
B) The carrying value decreases by equal amounts each year if effective interest amortization is used.
C) The carrying value decreases by larger and larger amounts each year if effective interest amortization is used.
D) The carrying value decreases by equal amounts each year if straight-line amortization is used and decreases by increasing amounts each year if effective interest amortization is used.