In any given interest period, the amortization of a bond discount will cause interest
A) expense to be less than interest paid.
B) expense to be greater than interest paid.
C) payable to be greater than interest expense.
D) payable to be less than interest receivable.
E) expense to be equal to interest paid less the discount amortization.

Question

Quizplus · Accepted Answer

The amortization of a bond discount increases the interest expense reported on the income statement because it adds the amortized amount to the actual interest paid for the period. This makes the interest expense greater than the cash interest paid.

In Any Given Interest Period, the Amortization of a Bond