The bond interest expense reflected on the income statement should reflect an amount based on the

A) effective interest rate
B) stated interest rate
C) nominal interest rate
D) face interest rate

Interest Expense

The expense an entity faces for using borrowed capital, recorded as a non-operating cost on the income statement.

Income Statement

A financial statement that shows a company's revenues, expenses, and profits over a specific period, reflecting its financial performance.

Effective Interest Rate

The actual return on an investment or the actual cost of a loan, taking into account the effect of compounding interest.