Which of the Following Is Correct When Using the Effective-Interest

question 92

Multiple Choice

Which of the following is correct when using the effective-interest method of amortizing the discount on bonds payable?

• A)Interest expense is computed by adding the portion of amortized discount to the cash interest paid.
• B)The amount of interest expense recognized each period increases over time.
• C)The amount of discount amortized each period decreases over time.
• D)The book value of the bonds payable liability decreases.

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