Using the simplified effective-interest amortization,interest expense is calculated as:
A) Bonds Payable, Net x Market Interest Rate x Time.
B) Bonds Payable, Net x Stated Interest Rate x Time.
C) Face Value x Stated Interest Rate x Time.
D) Face Value x Market Interest Rate x Time.

Question

Quizplus · Accepted Answer

The effective-interest method calculates interest expense based on the carrying amount of the bonds (Bonds Payable, Net) and the market interest rate at the time of issuance.

Using the Simplified Effective-Interest Amortization,interest Expense Is Calculated As