7. When using the effective interest method of amortization for bonds issued at discount,interest expense on bond liability reported on the income statement is:

1. Market rate of interest on the date the bonds times net carrying value of bond liability at the beginning of interest period.

2. Interest Expense to be recognized will increase as interest period lapses

3. Stated Interest rate on the date the bonds times net carrying value of bond liability at the beginning of interest period.

4. Interest Expense to be recognized will be constant for each interest period lapses