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:

Foramen Magnum

The foramen magnum is a large opening in the base of the skull through which the spinal cord connects to the brain, serving as a critical passage for neural structures.

Kyphosis

Kyphosis is a condition characterized by an excessive outward curvature of the spine, leading to a noticeable humpback appearance.

Vertebral Column

The vertebral column, or spine, is a series of interconnected bones and discs that provide support for the body and protect the spinal cord.

Lordosis

Lordosis refers to the inward curvature of a part of the lumbar and cervical spine, appearing as a swayback posture.