The Effective Interest Amortization Method

question 146

Multiple Choice

The effective interest amortization method:

• A)Allocates bond interest expense over the bond's life using a changing interest rate.
• B)Allocates bond interest expense over the bond's life using a constant interest rate.
• C)Allocates a decreasing amount of interest over the life of a discounted bond.
• D)Allocates bond interest expense using the current market rate for each interest period.
• E)Is not allowed by the FASB.

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