Which of the Following Statements Regarding the Effective-Interest Method of Amortization

question 116

Multiple Choice

Which of the following statements regarding the effective-interest method of amortization is incorrect?

• A)The amount of interest expense is different each period.
• B)The amount of discount or premium,on which amortization is calculated,increases each period.
• C)The effective-interest method is one of the options allowed by generally accepted accounting principles for all bond issues.
• D)The total interest expense over the life of a bond is the same as that reported under the straight-line method of amortization.

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