Salem Company has outstanding $100 million of 7% bonds, due in 7 years, and callable at...

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Salem Company has outstanding $100 million of 7% bonds, due in 7 years, and callable at 104. The bonds were issued at par and are selling today at a market price of 94. The amortization of a bond discount: Multiple Choice Decreases the carrying value of a bond and increases interest expense. Decreases the carrying value of a bond and decreases interest expense. Increases the carrying value of a bond and increases interest expense. Increases the carrying value of a bond and decreases interest expense. Salem Company has outstanding $100 million of 7% bonds, due in 7 years, and callable at 104. The bonds were issued at par and are selling today at a market price of 94. The amortization of a bond discount: Multiple Choice Decreases the carrying value of a bond and increases interest expense. Decreases the carrying value of a bond and decreases interest expense. Increases the carrying value of a bond and increases interest expense. Increases the carrying value of a bond and decreases interest expense.

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