Under the straight-line amortization method, interest expense on a bond sold at a discount is equal to the
A)interest paid plus bond discount amortization
B)interest rate times the book value of the bonds
C)interest rate times the face value of the bonds
D)interest paid minus bond discount amortization

Question

Quizplus · Accepted Answer

Under the straight-line amortization method, the interest expense on a bond sold at a discount is calculated as the interest paid (coupon payment) plus the bond discount amortization. This approach spreads the discount evenly over the life of the bond, increasing the interest expense recognized in the income statement.

Under the Straight-Line Amortization Method, Interest Expense on a Bond