According to GAAP, the interest paid semiannually on a bond payable can be computed using the straight-line method only when its amounts differ insignificantly from the effective-interest method.

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The straight-line method can be used under GAAP when the results are not materially different from the effective-interest method, which is the preferred method for amortizing bond premiums or discounts.

According to GAAP, the Interest Paid Semiannually on a Bond