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Basic Question 1 of 21
When bonds are issued at a discount, the long-term liability reported on the balance sheet for the bonds ______
B. increases each year during the life of the bond.
C. decreases each year during the life of the bond.
A. decreases or increases each year, depending on the stated interest rate.
B. increases each year during the life of the bond.
C. decreases each year during the life of the bond.
User Contributed Comments 4
| User | Comment |
|---|---|
| kalps | As the end value needs to be the PAR value that needs to be paid at maturity |
| bhaynes | Pull to par baby...Pull to par!!! |
| jonan203 | pull to par, i like that! |
| nmech1984 | haynes you rock! hehe |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
determine the initial recognition, initial measurement and subsequent measurement of bonds;
describe the effective interest method and calculate interest expense, amortisation of bond discounts/premiums, and interest payments;
CFA® 2024 Level I Curriculum, Volume 3, Module 25.