The effective interest method of amortizing discount or premium

The effective interest method of amortizing discount or premium



a. yields a consistent amount of interest, but a different interest rate, each period.
b. is not materially different in most cases from the straight-line method
c. yields a consistent interest rate, but a different amount of interest expense, each period
d. divides the discount or premium into equal amounts for each year of the bonds life
e. calculates interest expense based on the net liability and the coupon interest rate


Answer: c. yields a consistent interest rate, but a different amount of interest expense, each period


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