Carrying value of each bond issue affected by amortization

Reference no: EM133671156

Question

Assume that X Corp. has 2 bond issues outstanding. One reflects an associated bond discount and the other an associated bond premium. Assume amortization has just been recorded for each bond issue. How is the carrying value of each bond issue affected by the amortization?

The carrying value of the bonds reflecting a discount will INCREASE and the carrying value of the bonds reflecting a premium will DECREASE.

The carrying value of the bonds reflecting a discount will DECREASE and the carrying value of the bonds reflecting a premium will INCREASE.

The carrying value of the bonds reflecting a discount will DECREASE and the carrying value of the bonds reflecting a premium will also

DECREASE. The carrying value of the bonds reflecting a discount will INCREASE and the carrying value of the bonds reflecting a premium will also INCREASE.

Reference no: EM133671156

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