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Question
If the straight-line method of amortization of bond premium or discount is used, which of the following statements is true?
a. Annual interest expense will increase over the life of the bonds with the amortization of bond premium.
b. Annual interest expense will remain the same over the life of the bonds with the amortization of bond discount.
c. Annual interest expense will decrease over the life of the bonds with the amortization of bond discount.
d. Annual interest expense will increase over the life of the bonds with the amortization of bond discount.
Answer
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