Question

the effective interest rate method of amortizing bond discounts and premiums results in a constant amount of interest expense every period.

Answer 1

The flaw in the effective interest rate approach of amortizing bond discounts and premiums is that it produces a fixed amount of interest expenditure each period.

What is the most efficient way of amortization using interest?

An accounting technique used to discount a bond is the effective interest approach. Using this method, interest expenditure is calculated over the bond's life based on the amount of any discounts or premiums received when the bond was sold.

Which approach to interest rates works best?

The amount of interest expenditure during a specific accounting period correlates with the book value of a bond at the start of the accounting period using the effective interest rate technique. As a result, interest expense grows in proportion to a rise in a bond's book value.

To know more about interest visit :-

https://brainly.com/question/13324776

#SPJ4