Under the Effective-Interest Method of Amortizing a Bond Premium, the Interest

question 37

Multiple Choice

Under the effective-interest method of amortizing a bond premium, the interest expense recorded for each semi-annual interest payment:

• A) will equal the amount of cash paid for each semi-annual interest payment
• B) will decrease over the life of the bond
• C) is at a different percentage of the bond's carrying value for every interest payment
• D) will increase over the life of the bond