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A Company Uses the Effective Interest Method to Amortize a Bond

Question 73

Multiple Choice

A company uses the effective interest method to amortize a bond discount.Which of the following statements is true regarding the interest expense that is recognized each year?


A) It will be greater than the interest payment.
B) It will increase from year to year.
C) It will remain the same from year to year.
D) It will be greater than the interest payment and it will also increase from year to year.

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