Davis Corporation borrowed $50,000 on January 1, Year 1. The loan is for a 10-year period and has an annual interest rate of 9%. At the end of each year, Davis will make a payment of $7,791, which includes both principal and interest. With this loan, the amount of interest expense that Davis reports on its income statement will be the same for each year of the loan.
Answer the following statement true (T) or false (F)
False
Interest expense decreases each year on an installment loan as the carrying value of the loan liability declines.
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