A company uses the effective interest method to amortize a bond discount. Which of the following statements is true regarding the interest expense that is recognized each year?

A. It will be greater than the interest payment.
B. It will remain the same from year to year.
C. It will increase from year to year.
D. It will be greater than the interest payment and it will also increase from year to year.


Answer: D

Business

You might also like to view...

Which one of the following would not be considered an advantage of the corporate form of organization?

a. government regulation b. separate legal existence c. continuous life d. limited liability of stockholders

Business

Which of the following serves as a visual representation of a database?

A. ERD B. ERP C. EDD D. DFD

Business

Functions cannot be used in a(n) CHECK constraint or as a default value of a table column.

Answer the following statement true (T) or false (F)

Business

Memphis Company anticipates total sales for April, May, and June of $800,000, $900,000, and $950,000 respectively. Cash sales are normally 25% of total sales. Of the credit sales, 30% are collected in the same month as the sale, 65% are collected during the first month after the sale, and the remaining 5% are not collected. Compute the amount of cash received from total sales during the month of June.

A. $592,500. B. $561,500. C. $817,500. D. $890,000. E. $652,500.

Business