A Company Uses the Effective Interest Method to Amortize a Bond

question 73

Multiple Choice

A company uses the effective interest method to amortize a bond discount.Which of the following statements is true regarding the interest expense that is recognized each year?

• A)It will be greater than the interest payment.
• B)It will increase from year to year.
• C)It will remain the same from year to year.
• D)It will be greater than the interest payment and it will also increase from year to year.

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