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

question 87

Multiple Choice

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

• A) is at the same percentage of the bonds' carrying value for every interest payment
• B) is equal to the carrying value of the bond times the contract rate of interest for one half a year
• C) will increase each interest payment date
• D) will equal the amount of cash paid for each semiannual interest payment