Asked by
Jordan Taylor
on Nov 18, 2024
Verified
When bonds held as long-term investments are purchased at a price other than the face value, the premium or discount should be amortized over the remaining life of the bonds.
Premium Or Discount
Refers to the amount by which the selling or purchase price of a financial instrument differs from its face value.
Amortized
The process of gradually reducing the cost of an intangible asset through systematic charges to expense over its useful life.
- Familiarize oneself with the process and effects of bond investment, taking into account the treatment of the purchase cost, accumulation of interest, and the amortization of any premium or discount.
Verified Answer
KR
Learning Objectives
- Familiarize oneself with the process and effects of bond investment, taking into account the treatment of the purchase cost, accumulation of interest, and the amortization of any premium or discount.