Question $48$ of $50$

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Which of the following statements regarding the effective$-$interest method of accounting for bonds is false?

Over the life of the bonds, the carrying value increases for discounted bonds when using the effective$-$interest method.

GAAP usually requires use of the effective interest method.

The effective$-$interest method applies a constant percentage to the bond carrying value to compute interest expense.

The amount of periodic interest expense decreases over the life of a discounted bond issue when the effective$-$interest

method is used.