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Allocation of Interest Expense

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Discuss how and why interest expense is allocated between measurement periods.

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This solution explains how and why interest expense is allocated between measurement periods. The exact reasons of why this is necessary based on the loan period is explained.

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Interest expense is allocated between measurement periods to coincide with the appropriate portion of the loan that has been paid in that same period. We want the interest expense allocations to match the part of the loan that's currently due in the ...

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