The amortization of a bond discount will result in reporting an amount of interest expense for an interest period that
A)exceeds the amount of cash to be paid for interest for the period.
B)is less than the amount of cash to be paid for interest for the period.
C)has no predictable relationship with the amount of cash to be paid for interest for the period.
D)equals the amount of cash to be paid for interest for the period.

Question

Quizplus · Accepted Answer

The amortization of a bond discount increases the amount of interest expense reported because it adds the amortized discount to the actual cash interest paid, resulting in a total interest expense that exceeds the cash interest payment for the period.

The Amortization of a Bond Discount Will Result in Reporting