With the Effective Interest Method of Amortization, the amortization of a bond discount results in a(n)
A)increase in stockholders' equity.
B)decrease in liabilities.
C)increase in interest expense.
D)decrease in interest expense.

Question

Quizplus · Accepted Answer

The Effective Interest Method of Amortization results in an increase in interest expense as a portion of the bond discount is recorded as interest expense each period. Therefore, option C is the correct answer.

With the Effective Interest Method of Amortization, the Amortization of a Bond