Multiple Choice
A company uses the effective interest method to amortize a bond premium.Which of the following statements is true regarding the carrying value of the bond?
A) The carrying value will decrease by equal amounts each year.
B) The carrying value will decrease by smaller amounts each year.
C) The carrying value will decrease by larger amounts each year.
D) The carrying value will be lower than the face value of the bond until maturity.
Correct Answer:
Verified
Correct Answer:
Verified
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