Either straight-line or effective-interest amortization may be used for bond premiums or discounts,although the latter is preferred.

Question

Quizplus · Accepted Answer

Both straight-line and effective-interest amortization methods can be used for bond premiums or discounts, but the effective-interest method is preferred because it provides a more accurate picture of the interest expense over the life of the bond.

Either Straight-Line or Effective-Interest Amortization May Be Used for Bond