# The effective-interest method of bond amortization finds the difference between the ________ times the ________ and the ________ times the ________. A. stated interest rate, principal, stated interest rate, carrying value B. stated interest rate, principal, market interest rate, carrying value C. stated interest rate, carrying value, market interest rate, principal D. market interest rate, carrying value, market interest rate, principal

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### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

#### Solutions

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### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 13, Problem 10MC
Textbook Problem
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## The effective-interest method of bond amortization finds the difference between the ________ times the ________ and the ________ times the ________.A. stated interest rate, principal, stated interest rate, carrying valueB. stated interest rate, principal, market interest rate, carrying valueC. stated interest rate, carrying value, market interest rate, principalD. market interest rate, carrying value, market interest rate, principal

To determine

Concept introduction:

Bonds:

are defined as debt instruments which are usually issued by the company that borrows to its lenders. They are issued at a rate of interest that is specified and for a specified period of time. The bondholders receive a fixed rate of interest on the bonds and the repayment of the bonds is made at the maturity date.

Amortization of Bonds discount or premium:

The Bonds can be issued at a discount or premium. The discount or premium on issue of bonds or the life of bonds is amortized using the effective rate methods or the straight line method.

To choose:

The correct terms to fill in the blanks.

### Explanation of Solution

Bonds may be issued at a discount or premium. The discount or premium on the issue of bonds is or the life of bonds is amortized using the effective rate methods or the straight line methods...

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