The appropriate method of amortizing a premium or discount on issuance of bonds is the effective interest
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1. What is the effective interest method of amortization and how is it different from and similar to the straight line method of amortization?
2. Explain how a company computes amortization using the effective interest method, and why and how do amounts obtained using the effective interest method differ from amounts computed under the straight-line method.
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1 The effective interest method of amortization of bond discount or premium applies a constant interest rate to the carrying value of debt as opposed ...View the full answer
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Ali Khawaja
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Related Book For 
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
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