登录之后可查看解析

C is corrent. When a company uses the effective interest method to amortize a discount on bonds payable, interest expense (which is based on the carrying value of the bonds) is lower in earlier years when compared to interest expense under the straight-line method. Therefore, the straight-line method results in understated retained earnings. Since more interest expense is recorded under the straight-line method, amortization of the discount on bonds payable will be greater under the straight-line method when compared to the effective interest method. Higher amortization results in a lower unamortized discount and, therefore, the carrying value of the bonds using the straight-line method is overstated.
A is incorrect. When a company uses the effective interest method to amortize a discount on bonds payable, interest expense (which is based on the carrying value of the bonds) is lower in earlier years when compared to interest expense under the straight-line method. Therefore, the straight-line method results in understated retained earnings. Since more interest expense is recorded under the straight-line method, amortization of the discount on bonds payable will be greater under the straight-line method when compared to the effective interest method. Higher amortization results in a lower unamortized discount and, therefore, the carrying value of the bonds using the straight-line method is overstated. 
B is incorrect. When a company uses the effective interest method to amortize a discount on bonds payable, interest expense (which is based on the carrying value of the bonds) is lower in earlier years when compared to interest expense under the straight-line method. Therefore, the straight-line method results in understated retained earnings. Since more interest expense is recorded under the straight-line method, amortization of the discount on bonds payable will be greater under the straight-line method when compared to the effective interest method. Higher amortization results in a lower unamortized discount and, therefore, the carrying value of the bonds using the straight-line method is overstated. 
D is incorrect. When a company uses the effective interest method to amortize a discount on bonds payable, interest expense (which is based on the carrying value of the bonds) is lower in earlier years when compared to interest expense under the straight-line method. Therefore, the straight-line method results in understated retained earnings. Since more interest expense is recorded under the straight-line method, amortization of the discount on bonds payable will be greater under the straight-line method when compared to the effective interest method. Higher amortization results in a lower unamortized discount and, therefore, the carrying value of the bonds using the straight-line method is overstated.