The Result of Using the Effective Interest Method of Amortization

question 148

Short Answer

The result of using the effective interest method of amortization for bond discounts is that the
a.interest expense for each amortization period is constant.
b.effective interest rate for each amortization period is constant.
c.amount of interest expense decreases each period.
d.cash interest payment is greater than the interest expense.

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Definitions:

Time Horizons

The length of time over which an organization or individual projects, plans, or expects to achieve its goals.

HR Forecasting

The process used in human resources planning to predict an organization’s future need for employees based on its business goals and strategies.

Attrition

The process of reducing an HR surplus by allowing the size of the workforce to decline naturally because of the normal pattern of losses associated with retirements, deaths, and voluntary turnover.

HR Surplus

A situation in which the organization has more human capital than it requires in order to meet its current or forecasted human capital requirements.