When the Effective Interest Method of Amortization Is Used,what Happens

question 97

Multiple Choice

When the effective interest method of amortization is used,what happens to the amount of discount or premium amortized as a bond moves toward maturity?

• A)The amount of discount or premium amortized each period decreases.
• B)The amount of discount or premium amortized each period increases for bonds sold at a discount but decreases for bonds sold at a premium.
• C)The amount of discount or premium amortized each period increases.
• D)The amount of discount or premium amortized each period decreases for bonds sold a discount but increases for bonds sold at a premium.

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Definitions:

ECG

Electrocardiogram, a non-invasive test that records the electrical activity of the heart to assess its health and detect any abnormalities.

P Wave

The first wave in an electrocardiogram, representing the depolarization of the atria of the heart.

Electrical Impulse

A sudden surge of electrical energy or power, typically referring to the signals transmitted within biological organisms, especially neurons.

T Wave

A component of the ECG representing the repolarization of the ventricles of the heart.