Penmark Corporation issued 15-year term bonds at a discount in 2010.Interest is payable semi-annually.Which of the following statements is true,assuming that the effective interest method of amortization is used for the bond discount?
A) Interest expense decreases each six-month interest period.
B) Interest expense as a percentage of the bond's book value changes from period to period.
C) Interest expense increases each six-month interest period.
D) Interest expense remains constant in amount for each interest period.
Correct Answer:
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