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

Question

Quizplus · Accepted Answer

The Effective Interest Method results in a decrease in interest expense over time as the bond premium is amortized, reducing the carrying amount of the bond.

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