Chapter 1.25 Financial Asset at Amortized Cost Test Prep With Correct Defined Answers.
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Course
AMORTIZATION
Institution
AMORTIZATION
Bond - correct answer Debt security in which bondholder is a creditor and issuer is a debtor
Bond indenture - correct answer Certificate which evidences bond
True - correct answer T/...
Bond - correct answer Debt security in which bondholder is a creditor and issuer is a
debtor
Bond indenture - correct answer Certificate which evidences bond
True - correct answer T/F Interest on bond investment is usually paid semiannually
1. FA held for trading
2. FA at amortized cost
3. FA at FVOCI
4. FA at FVPL by irrevocable designation or fair value option - correct answer
Classification of bond investments
FV plus transaction costs and if held for trading or FVPL, transaction costs are expensed - correct answer
Initial measurement of bond investments
1. FVPL
2. FVOCI
3. Amortized cost - correct answer Subsequent measurement of bond investments
True - correct answer T/F When bonds are acquired between interest dates,
purchase price normally includes the accrued interest
Debit trading securities and interest income, credit cash - correct answer Entry to
record acquisition of bonds between interest dates
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