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Interest Expense
The cost incurred by an entity for borrowed funds; interest payments made on any form of debt over a given period.
Effective Interest Method
An accounting practice used to allocate loan discounts or premiums over the life of the loan, reflecting the financial interest rate more accurately.
Discount Amortization
The process of gradually reducing the discount on bonds payable or notes payable over the life of the debt.
Theoretical Justification
The process of providing logical reasoning and evidence to support a theory or proposition.
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