Match these terms with their definitions.
-Under this method, equal amounts of premium or discount are amortized to interest expense each period.
A)Bond
B)Contract, coupon, stated rate
C)Discount
D)Effective interest rate method
E)Face value, par value, principal
F)Interest amortization
G)Lease
H)Lessee
I)Lessor
J)Leverage
K)Long-term debt
L)Market rate, yield
M)Maturity
N)Premium
O)Straight-line method

Question

Quizplus · Accepted Answer

The straight-line method of amortization involves spreading out the premium or discount on bonds or other financial instruments evenly over the life of the instrument. Under this method, the amount of premium or discount amortized to interest expense is the same in each accounting period.

Match These Terms with Their Definitions