When the Straight-Line Method of Amortization Is Used for a Bond

question 104

Multiple Choice

When the straight-line method of amortization is used for a bond discount, the amount of interest expense for an interest period is calculated by

• A)adding the amount of discount amortized for that period to the amount of cash paid for interest during the period.
• B)subtracting the amount of discount amortized for that period from the amount of cash paid for interest during the period.
• C)multiplying the face value of the bonds by the stated interest rate.
• D)multiplying the face value of the bonds by the market interest rate.

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Definitions:

Corpus Luteum

A temporary endocrine structure in female ovaries that is involved in the production of relatively high levels of progesterone, moderate levels of estradiol, inhibin A, and small amounts of estrogen.

Testes

Male reproductive organs that produce sperm and hormones, such as testosterone.

Primary Oocyte

An immature egg cell that undergoes meiosis to form a haploid ovum, a critical cell type in female reproduction.

Resumes Meiosis

Refers to the process where cells continue the meiotic division after being paused at a specific stage, leading to the production of gametes.