Choice "C" is correct. Comparing interest expense with the bond payable amount for reasonableness provides evidence that all interest expense was included and that the outstanding balance of the bonds payable is reasonable, as well as providing limited evidence concerning the amortization of bond discounts or premiums.
Choice "b" is incorrect. The auditor would recalculate bond premiums and discounts, rather than use an analytical procedure.
Choice "a" is incorrect. The auditor would normally examine documentation of the bond instruments rather than of assets purchased to determine the existence of any liens on the assets.
Choice "d" is incorrect. The auditor would confirm the outstanding bonds payable balance, not the existence of individual bondholders.