Under the Effective-Interest Method of Amortization, Interest Expense Each Period

question 205

Multiple Choice

Under the effective-interest method of amortization, interest expense each period can be calculated by multiplying the:

• A) face value of the bonds times the effective-interest rate for the appropriate time period.
• B) carrying value of the bonds times the effective-interest rate for the appropriate time period.
• C) face value of the bonds times the stated interest rate for the appropriate time period.
• D) carrying value of the bonds times the stated interest rate for the appropriate time period.

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