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Which company uses effective interest method of amortizing

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Reference no: EM132817135

Problem 1: A company uses the effective interest method of amortizing a bond discount or premium in order to:

a. Disclose the interest charges imposed on the company by the bondholders.

b. Report a constant amount of interest expense each semiannual period.

c. Simplify the process of amortizing and recording any premium or discount.

d. Amortize a constant amount of premium or discount each semiannual period.

Problem 2: Use of the effective interest method in amortizing a discount on bonds payable would result in

a. Face value of the bond.

b. Present value of the principal amount due at the end of the life of the bond plus the present value of the interest payments made during the life of the bond.

c. Face value of the bond plus the present value of the interest payments made during the life of the bond.

d. Face value of the bond plus the interest payments made during the life of the bond.

Reference no: EM132817135

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