If Recorded Interest Expense Is Higher Than the Auditor's Expectation

question 54

Multiple Choice

If recorded interest expense is higher than the auditor's expectation calculated using recorded debt, all of the following are potential explanations except that:

• A)the entity failed to record debt.
• B)debt was recorded as equity.
• C)the entity used the face interest rate to calculate interest expense on a bond issued at a discount.
• D)the entity used the face interest rate to calculate interest expense on a bond issued at a premium.

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