method to amortize the premium

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On July 1, year 7, Dean Co. issued, at a premium, bonds with a due date of July 1, year 12. Dean incorrectly used the straight-line method instead of the effective interest method to amortize the premium. How were the following amounts affected by the error at June 30, year 12?
Bond carrying                             Retained
amount                                         earnings
A. Overstated                          Understated
B. Understated                       Overstated
C. Overstated                           No effect
D. No effect                               No effect

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