When using the effective-interest method of bond amortization, Interest Expense ______ each payment if the bonds were issued at a discount.

Respuesta :

When the effective-interest method of bond amortization is used, the Interest Expense exceeds each payment if the bonds were issued at a discount.

In short, the Interest Expense is based on the bond's proceeds, which are always below the face value of the bonds when issued at a discount.

Thus, the interest expense is calculated using the effective interest rate on the bond's proceeds.

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Answer:

increases

Explanation: