The effective interest method produces a constant dollar amount of bond interest expense to be reported each interest period.

Name: The effective interest method produces a constant dollar amount of bond interest expense to be reported each interest period.
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The effective interest method produces a varying amount of bond interest expense each period because it applies the market rate of interest at issuance to the outstanding balance of the bond, which changes as the bond is paid down or amortizes.

The Effective Interest Method Produces a Constant Dollar Amount of Bond