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Compared to annual effective interest amortization amount

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Reference no: EM132461430

Question problem 1: When bonds are sold at a premium, if the annual straight-line amortization amount is compared to the annual effective interest amortization amount over the life of the bond issue, the annual amount of the straight-line amortization of premium is:

Multiple Choice

  • Higher than the effective interest amount in the early years and less than the effective interest amount in the later years.
  • Higher than the effective interest amount every year.
  • Less than the effective interest amount in the early years and more than the effective interest amount in the later years.
  • Less than the effective interest amount every year

Reference no: EM132461430

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