Under the Effective-Interest Method of Amortizing Bond Premium, the Interest

question 142

Multiple Choice

Under the effective-interest method of amortizing bond premium, the interest expense recorded for each semiannual interest payment:

• A)will increase over the life of the bond.
• B)will equal the amount of cash paid for each semiannual interest payment.
• C)is equal to the carrying value of the bond times the contract rate of interest for each semiannual interest period.
• D)is at the same percentage of the bond's carrying value for every interest payment.

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