Under the effective-interest method of amortization, the cash payment on each interest payment date will:
A)decrease if bonds are issued at a premium.
B)remain the same for each interest period.
C)increase if bonds are issued at a discount.
D)increase if bonds are issued at par.

Question

Quizplus · Accepted Answer

Under the effective-interest method, the cash payment remains the same for each interest period as it is based on the stated interest rate of the bond.

Under the Effective-Interest Method of Amortization, the Cash Payment on Each