When Interest Expense Is Calculated Using the Effective-Interest Amortization Method,interest

question 86

Multiple Choice

When interest expense is calculated using the effective-interest amortization method,interest expense (assuming that interest is paid annually) always equals the

• A) actual amount of interest paid.
• B) book value of the bonds multiplied by the stated interest rate.
• C) book value of the bonds multiplied by the effective interest rate.
• D) maturity value of the bonds multiplied by the effective interest rate.

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