Which of the following statements about bond accounting under the effective interest method is correct?

Are you having trouble answering the question “Which of the following statements about bond accounting under the effective interest method is correct?”? If that’s the case, you don’t need to worry anymore. Azanswer has brought you the correct answer to your question.

Which of the following statements about bond accounting under the effective interest method is correct?

A) The cash interest paid is calculated as the bond face value u the market rate.
B) The interest expense is calculated as the carrying value u the market rate.
C) The difference between the cash interest paid and the interest expense is added to the carrying value of bonds sold at a premium.
D) The difference between the interest expense and the interest paid is deducted from the carrying value of bonds sold at a discount.

Answer: B

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Which of the following statements about bond accounting under the effective interest method is correct?

Are you having trouble answering the question “Which of the following statements about bond accounting under the effective interest method is correct?”? If that’s the case, you don’t need to worry anymore. Azanswer has brought you the correct answer to your question.

Which of the following statements about bond accounting under the effective interest method is correct?

A) The cash interest paid is calculated as the bond face value u the market rate.
B) The interest expense is calculated as the carrying value u the market rate.
C) The difference between the cash interest paid and the interest expense is added to the carrying value of bonds sold at a premium.
D) The difference between the interest expense and the interest paid is deducted from the carrying value of bonds sold at a discount.

Answer: B

We hope you have got the correct answer to your question “Which of the following statements about bond accounting under the effective interest method is correct?”, which was part of Accounting MCQs & Answers. Thanks for choosing us.

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Your email address will not be published. Required fields are marked *