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How were the amounts affected by the error

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Question 1: On March 1, 1997, Clark Co. issued bonds at a discount. Clark incorrectly used the straight-line method instead of the effective interest method to amortize the discount. How were the following amounts, as of December 31, 1997, affected by the error?

a. Overstated - Bond carrying amount, Overstated - Retained earnings

b. Understated - Bond carrying amount, Understated - Retained earnings

c. Overstated - Bond carrying amount, Understated - Retained earnings

d. Understated - Bond carrying amount, Overstated - Retained earnings

Reference no: EM132995716

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