When the Effective Interest Method of Amortization Is Used for a Bond

question 173

Multiple Choice

When the effective interest method of amortization is used for a bond premium,the amount of interest expense for an interest period is calculated by multiplying the

• A)carrying value of the bonds at the beginning of the period by the face interest rate.
• B)face value of the bonds at the beginning of the period by the effective interest rate.
• C)carrying value of the bonds at the beginning of the period by the effective interest rate.
• D)face value of the bonds at the beginning of the period by the face interest rate.

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