With the effective interest method of amortization, the amortization of bond discount results in an)
A)increase in stockholders' equity.
B)decrease of stockholders' equity.
C)increase in interest expense.
D)decrease in interest expense.

Question

Quizplus · Accepted Answer

With the effective interest method of amortization, the bond discount is added to the bond's carrying value, resulting in a higher interest expense compared to the straight-line method of amortization. Therefore, the correct choice is an increase in interest expense.

With the Effective Interest Method of Amortization, the Amortization of Bond