Which of the Following Is True Regarding the Effective Interest

question 153

Multiple Choice

Which of the following is true regarding the effective interest amortization method?

• A)Allocates bond interest expense using a changing interest rate.
• B)Allocates bond interest expense 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 period.
• E)Is not allowed by the FASB.

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