Using the effective-interest method of amortization, interest expense is based on the carrying amount of the bonds times the effective-interest rate for the interest period.

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This statement is true. The effective-interest method of amortization calculates interest expense based on the carrying amount of bonds and the effective-interest rate for the interest period. This method is used to more accurately allocate interest expense over the life of the bond.

Using the Effective-Interest Method of Amortization, Interest Expense Is Based