The difference between the effective-interest amount and the cash interest payment is the amount of discount amortized for the period.

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This statement is true. When a bond is sold at a discount, the effective-interest amount is higher than the cash interest payment. The difference between these two amounts represents the amount of discount that needs to be amortized over the life of the bond. This process is known as the effective-interest method of amortizing bond discounts.

The Difference Between the Effective-Interest Amount and the Cash Interest