Question

a. How are interest and the amount of discount or premium amortization computed 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?
b. Generally, the effective interest method is defended on the grounds that it provides the appropriate amount of interest expense. Does it also provide an appropriate balance sheet amount for the liability balance? Why or why not?



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  • CreatedAugust 26, 2013
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