If the Straight-Line Method of Amortization of Bond Premium or Discount

question 169

Multiple Choice

If the straight-line method of amortization of bond premium or discount is used, which of the following statements is true?

• A) Annual interest expense will increase over the life of the bonds with the amortization of bond premium.
• B) Annual interest expense will remain the same over the life of the bonds with the amortization of bond discount.
• C) Annual interest expense will decrease over the life of the bonds with the amortization of bond discount.
• D) Annual interest expense will increase over the life of the bonds with the amortization of bond discount.

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Definitions:

Corrosion

The process by which metals deteriorate due to reactions with chemicals in their environment.

Body Fluids

Liquids originating from inside the bodies of living organisms that include such substances as blood, urine, and saliva.

Surgical Procedure

A medical intervention involving an incision with instruments, performed to repair damage or arrest disease in a living body.

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