The Result of Using the Effective Interest Method of Amortization

question 138

Multiple Choice

The result of using the effective interest method of amortization for bond discounts is that the

• A)interest expense for each amortization period is constant.
• B)effective interest rate for each amortization period is constant.
• C)amount of interest expense decreases each period.
• D)cash interest payment is greater than the interest expense.

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Definitions:

Empirical Research

A way of gaining knowledge by means of direct and indirect observation or experience, prioritizing evidence and experimentation in the pursuit of understanding.

Middle-Class

A socioeconomic group situated between the working class and the upper class, typically characterized by moderate to high income, educational attainment, and a sense of cultural and political influence.

Reliability

The consistency and dependability of a measurement, test, or assessment over time.

Validity

The extent to which a test or instrument measures what it claims to measure.