Final answer:
Under the effective-interest method, the interest expense recognized each period is at a different percentage of the bond's carrying value for every interest payment, as it decreases over time due to premium amortization.
Step-by-step explanation:
The effective-interest method of amortizing a bond premium involves adjusting the amount of interest expense recognized in each period based on the carrying amount of the bond. When a bond is issued at a premium, it means that the bond was sold for more than its face value. The interest expense is not the same as the cash paid for each interest payment; instead, it is calculated by applying the market interest rate at the time of issuance to the bond's carrying value. Over the life of the bond, the bond premium is amortized, and the carrying value of the bond decreases towards its face value.
Therefore, the correct answer to the question is c) is at a different percentage of the bond's carrying value for every interest payment. This is because the carrying value of the bond decreases with each payment due to the amortization of the premium, but the market interest rate (used for calculating interest expense) remains constant. As a result, the actual dollar amount of the interest expense also decreases over the life of the bond.