1. If bonds are sold at a discount and the straight-line method of amortization is used, interest expense in earlier years will: (A) Exceed what is would have been had the effective interest rate method of amortization been used. (B) Be less than what it would have been had the effective interest rate method of amortization been used. (C) Be the same as it would have been had the effective interest rate method of amortization been used. (D) None of the above.
1. If bonds are sold at a discount and the straight-line method of amortization is used, interest expense in earlier years will: (A) Exceed what is would have been had the effective interest rate method of amortization been used. (B) Be less than what it would have been had the effective interest rate method of amortization been used. (C) Be the same as it would have been had the effective interest rate method of amortization been used. (D) None of the above.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:1. If bonds are sold at a discount and the straight-line method of amortization is used, interest expense in earlier years will:
(A) Exceed what is would have been had the effective interest rate method of amortization been used.
(B) Be less than what it would have been had the effective interest rate method of amortization been used.
(C) Be the same as it would have been had the effective interest rate method of amortization been used.
(D) None of the above.
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