1. If bonds are issued for a price below their face value, the bond discount should be:
A. charged to expense on the date the bonds are issued.
B. amortized over the life of the bond issue.
C. shown as an addition to Bonds Payable in the Long-Term Liabilities section of the balance sheet.
D. shown as a current liability on the balance sheet.
2. A corporation paid $104,000 to retire bonds with a face value of $100,000 and an unamortized premium balance of $3,000. The entry to record the early retirement of the bonds will include the recognition of a loss of:
A. $7,000.
B. $4,000.
C. $1,000.
D. $3,000.