On November 1, 2019, Davis Company issued $31,500, ten-year, 7% bonds for $29,850. The bonds...
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On November 1, 2019, Davis Company issued $31,500, ten-year, 7% bonds for $29,850. The bonds were dated November 1, 2019, and interest is payable each November 1 and May 1. Davis uses the straight-line method of amortization. Which of the following is incorrect with regard to the Davis bonds when the straight-line method of amortization is utilized? Multiple Choice The market rate of interest exceeded the coupon rate of interest when the bonds were issued. O The semi-annual interest expense is less than the semi-annual cash interest payment. The semi-annual interest expense is $1,185. c The book value of the bonds increases $82.50 every six months
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