The amortization of the principal balance affect the amount of interest expense recorded because its reduces the amount of interest expense each year.
An Amortization is a financial technique used in paying off a debt from loan/mortgage over time through regular payments.
As principal balance reduces every year, the interest expense becomes smaller and principal repayment amount becomes larger.
In conclusion, the amortization of the principal balance affect the amount of interest expense recorded because its reduces the amount of interest expense each year.
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