Use of the effective-interest method in amortizing bond premiums and discounts results in1. a greater amount of interest income over the life of the bond issue than would result from use of the straight-line method. 2. a varying amount being recorded as interest income from period to period. 3. a variable rate of return on the book value of the investment. 4. a smaller amount of interest income over the life of the bond issue than would result from use of the straight-line method.

Question

Dominique Odom

Business

23 August, 08:24

Use of the effective-interest method in amortizing bond premiums and discounts results in1. a greater amount of interest income over the life of the bond issue than would result from use of the straight-line method. 2. a varying amount being recorded as interest income from period to period. 3. a variable rate of return on the book value of the investment. 4. a smaller amount of interest income over the life of the bond issue than would result from use of the straight-line method.

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Kenneth Guerra · Answer 1

b. a varying amount being recorded as interest income from period to period.

Explanation:

Use of the effective-interest method in amortizing bond premiums and discounts results in

a. a greater amount of interest income over the life of the bond issue than would result from use of the straight-line method.

b. a varying amount being recorded as interest income from period to period.

c. a variable rate of return on the book value of the investment.

d. a smaller amount of interest income over the life of the bond issue than would result from use of the straight-line method.