When Using the Effective-Interest Method of Amortizing a Discount or Premium,interest

question 71

Multiple Choice

When using the effective-interest method of amortizing a discount or premium,interest expense is calculated by multiplying the:

• A) contract interest rate by the face value of the bonds
• B) effective-interest rate by the face value of the bonds
• C) contract interest rate by the carrying value of the bonds
• D) effective-interest rate by the carrying value of the bonds

---

Definitions:

Advertising Law

Regulations and legal standards that govern the ways in which products and services can be promoted to the public.

Deceptive Practices

Activities by individuals or businesses that mislead or lie to consumers, often regarding the nature or quality of a product or service.

Unfair Practices

Activities considered unethical or illegal, often related to business dealings, that can lead to consumer harm or market manipulation.

Discharged

Relieved from a legal duty, obligation, or liability, often in the context of debts or contractual obligations.