The annual interest payment on bonds:
A)increases over the life of the bonds when bonds are issued at a discount.
B)decreases over the life of the bonds when bonds are issued at a discount.
C)stays constant over the life of the bonds,regardless of whether bonds are issued at par,a discount,or a premium.
D)increases over the life of the bonds under the effective-interest method,but stays constant under the straight-line method of amortization.

Question

Quizplus · Accepted Answer

The annual interest payment equals the face value times the stated interest rate times the time period.It is constant.The amortization method used affects the amount of Interest Expense,but not the interest payment.

The Annual Interest Payment on Bonds