Under the Effective-Interest Method of Amortization, the Amount of Discount

question 31

Multiple Choice

Under the effective-interest method of amortization, the amount of discount amortized each interest period is equal to the:

• A) amount of interest expense less the cash paid.
• B) amount of interest expense plus the cash paid.
• C) face value of the bond times the stated interest rate.
• D) face value of the bond times the market interest rate at the date of issue.

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