If bonds are initially sold at a discount and the straight-line method of amortization is used, interest expense in the earlier years will
A) exceed what it would have been had the effective-interest method of amortization been used.
B) be less than what it would have been had the effective-interest method of amortization been used.
C) be the same as what it would have been had the effective-interest method of amortiza-tion been used.
D) be less than the stated (nominal) rate of interest.

Question

Quizplus · Accepted Answer

Under the straight-line method, the same amount of discount is amortized each period, leading to higher interest expense in earlier years compared to the effective-interest method, which allocates more interest expense to later periods.

If Bonds Are Initially Sold at a Discount and the Straight-Line