When the Effective Interest Method of Amortization Is Used,what Happens

question 97

Multiple Choice

When the effective interest method of amortization is used,what happens to the amount of discount or premium amortized as a bond moves toward maturity?

• A)The amount of discount or premium amortized each period decreases.
• B)The amount of discount or premium amortized each period increases for bonds sold at a discount but decreases for bonds sold at a premium.
• C)The amount of discount or premium amortized each period increases.
• D)The amount of discount or premium amortized each period decreases for bonds sold a discount but increases for bonds sold at a premium.

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Definitions:

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The application of scientific knowledge for practical purposes, especially in industry, through machinery, equipment, and software.

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Legal rights that come from the creation of the mind, such as inventions, literary and artistic works, designs, and symbols.

Company Product

The goods or services offered by a company to its customers.

Glue

A substance used to bond materials together by surface attachment.