A Note on Teaching the Effective Interest Method Related Problems in Accounting

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Advances in Accounting Education

ISSN: 1085-4622
Series editor(s): Dorothy Feldmann and Timothy Rupert

Subject Area: Accounting and Finance

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Document Information:
Title:	A Note on Teaching the Effective Interest Method Related Problems in Accounting
Author(s):	Avinash Arya
Volume:	12 Editor(s): Anthony H. Catanach, Dorothy Feldmann ISBN: 978-1-78052-222-7 eISBN: 978-1-78052-223-4
Citation:	Avinash Arya (2011), A Note on Teaching the Effective Interest Method Related Problems in Accounting, in Anthony H. Catanach, Dorothy Feldmann (ed.) Advances in Accounting Education: Teaching and Curriculum Innovations (Advances in Accounting Education, Volume 12), Emerald Group Publishing Limited, pp.97-116
DOI:	10.1108/S1085-4622(2011)0000012007 (Permanent URL)
Publisher:	Emerald Group Publishing Limited
Article type:	Chapter Item
Abstract:	This note presents a method of teaching accounting problems involving the use of the effective interest method such as bonds, notes, capital leases, and installment sales. The method is conceptually sound and simpler than the traditional method found in current textbooks and stimulates student interest by focusing on the economics of the transaction and relating it to real-life examples. To assess its pedagogical efficacy, the method was tested in the introductory and intermediate accounting classes. In both courses, the results indicate that students' test scores are significantly higher under the new method than the traditional method. It is hoped that this evidence of the superiority of the new method in a classroom environment will spur its adoption by instructors and textbook writers.