Using the simplified effective-interest amortization,the credit to Cash each interest payment is calculated as:
A) Bonds Payable, Net x Market Interest Rate x Time.
B) Bonds Payable, Net x Stated Interest Rate x Time.
C) Face Value x Stated Interest Rate x Time.
D) Face Value x Market Interest Rate x Time.

Question

Quizplus · Accepted Answer

The credit to Cash for each interest payment is calculated using the Face Value of the bond, the Stated Interest Rate, and the Time period, as the stated rate is the rate at which interest is actually paid.

Using the Simplified Effective-Interest Amortization,the Credit to Cash Each Interest