what is the straight-line amortization method?

Question: In regard to a bond discount or premium, what is the straight-line amortization method?

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Expert Solution

Step 1: Definition of bonds

A bond is a type of long-term liability in which the company issues a bond to fulfill a large number of money needs.

Step 2: Straight-line amortization

Straight-line amortization is a method in which an equal amount of discount or premium is amortized every year. This is a straightforward method to amortize the discount or premium of bonds

Amortization is a method to reduce the cost of the asset.

Sahil Dangi answered 1 year ago

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