Answer:
c. interest paid over the life of the bond minus the amount of premium at sale
point.
Explanation:
when bonds are issued at premium the total interest cost of the bonds over the life of the bonds is equal to the amount of interest paid over the life of the bond minus the amount of premium at sale point.
From below journal entry you can see that, When interest payment is made cash is credited full amount but interest is debited after deducting amortised premium.
Journal entry if bonds are issued at premium
cash xx
Bonds Payable xx
Premium on bonds payable
xx
Interest Expense xx
Preminum on bonds payable xx
cash xx
