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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- Under the effective-interest method of bond discount or premium amortization, the periodic interest expense is equal to Select one: a. the market rate multiplied by the beginning-of-period carrying amount of the bonds b. the stated (nominal) rate of interest multiplied by the face value of the bonds. c. the stated rate multiplied by the beginning-of-period carrying amount of the bonds. 17arrow_forwardDefine the following Bond related terms: Issue Date Face Amount Term Contract Rate Payment Frequency Interest Payment Amount Bond Proceeds Market (effective) rate Maturity Amountarrow_forwardThe effective interest technique is used to charge a discount on a bond that is due to be paid to interest cost. true or falsearrow_forward
- A bond issue sold at a premium is valued on the statement of financial position at the a. maturity value. b. maturity value plus the unamortized portion of the premium. c. cost at the date of investment. d. maturity value less the unamortized portion of the premium.arrow_forwardThe interest rate stated on the bond is known as:(a) effective rate. (c) nominal rate.(b) market rate. (d) real ratearrow_forwardWhen the initial present value of a bond payable is higher than its face amount, an entity would usually ________ the _______________________ account when recording amortization of interests. debit; Premium on Note Receivable credit; Premium on Note Receivable debit; Interest Expense credit; Interest Expensearrow_forward
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