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dezoksy [38]
3 years ago
7

When the effective-interest method of bond discount amortization is used,

Business
1 answer:
SSSSS [86.1K]3 years ago
6 0

Answer: C. interest expense will not be a constant dollar amount over the life of the bond.

Explanation:

When a bond is sold at a discount, the discount will have to be amortized over the life of the bond to ensure that it reaches par at maturity.

As a result, the interest expense will be based on a larger figure every year which would mean that it would have to be larger each time. t will therefore not be a constant dollar amount over the life of the bond.

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