When the Straight-Line Method of Amortization Is Used for a Bond

question 14

Multiple Choice

When the straight-line method of amortization is used for a bond discount,the amount of interest expense for an interest period is calculated by

• A) adding the amount of discount amortization for the period to the amount of cash paid for interest during the period.
• B) deducting the amount of discount amortization for the period from the amount of cash paid for interest during the period.
• C) multiplying the carrying value of the bonds by the effective interest rate.
• D) multiplying the face value of the bonds by the face interest rate.

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Definitions:

Sternocleidomastoid

A muscle in the neck that acts to flex and rotate the head, named for its attachment points at the sternum, clavicle, and mastoid process of the temporal bone.

Masseter

A facial muscle that plays a major role in the chewing of food by elevating the mandible (lower jaw).

Extensor Hallicus Longus

A muscle in the leg that extends the big toe and aids in dorsiflexion of the foot.

Big Toe

The largest toe on the human foot, which plays a significant role in maintaining balance and walking.