Using the Effective Interest Rate Method to Amortize Bond Discount

question 145

Multiple Choice

Using the effective interest rate method to amortize bond discount will

• A) cause the carrying value of the bond to decrease as it approaches the maturity date.
• B) cause the carrying value of the bond to increase as it approaches the maturity date.
• C) cause the carrying value to be the same as the issue price.
• D) not change the carrying value.

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Definitions:

Visual Cortex

The part of the cerebral cortex that processes visual information, located in the occipital lobe of the brain.

Occipital Lobes

Lobes at the lower back part of the brain’s cerebral cortex; they contain areas that receive visual information.

Broca's Area

A region in the frontal lobe of the dominant hemisphere of the brain with functions linked to speech production.

Speech-Production

The complex process involving the coordination of mental and physical activities to produce spoken language.