The Effective Interest Rate Method

question 151

Multiple Choice

The effective interest rate method

• A)Allocates bond interest expense using a changing interest rate
• B)Allocates interest expense using the contract rate
• C)Allocates a decreasing amount of interest expense over the life of a bond originally sold at a discount
• D)Allocates bond interest expense using a constant interest rate
• E)Allocates interest expense based on a constant carrying value

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