How does the amortization of the principal balance on an installment note payable affect the amount of interest expense recorded each succeeding year?
A)Reduces the amount of interest expense each year
B)Increase the amount of interest expense each year
C)Has no effect on interest expense each year
D)Cannot be determined from the information provided

Question

Quizplus · Accepted Answer

As the principal balance declines each year,the interest expense becomes smaller,and the amount of principal repayment becomes larger with each subsequent payment.

How Does the Amortization of the Principal Balance on an Installment