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When a company uses the the effective-interest method to amortize a bond discount amortization, the interest expense is equal to   a)  the market rate multiplied by the beginning-of-period carrying amount of the bonds.   b)  the market rate of interest multiplied by the face value of the bonds.   c)  the stated rate multiplied by the beginning-of-period carrying amount of the bonds.   d)  the stated (nominal) rate of interest multiplied by the face value of the bonds.

When a company uses the the effective-interest method to amortize a bond discount amortization, the interest expense is equal to   a)  the market rate multiplied by the beginning-of-period carrying amount of the bonds.   b)  the market rate of interest multiplied by the face value of the bonds.   c)  the stated rate multiplied by the beginning-of-period carrying amount of the bonds.   d)  the stated (nominal) rate of interest multiplied by the face value of the bonds.

Financial Accounting Intro Concepts Meth/Uses
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter11: Notes, Bonds, And Leases
Section: Chapter Questions
Problem 3Q
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When a company uses the the effective-interest method to amortize a bond discount amortization, the interest expense is equal to

 

a) 

the market rate multiplied by the beginning-of-period carrying amount of the bonds.
 

b) 

the market rate of interest multiplied by the face value of the bonds.
 

c) 

the stated rate multiplied by the beginning-of-period carrying amount of the bonds.
 

d) 

the stated (nominal) rate of interest multiplied by the face value of the bonds.
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