1. The amortization of a discount on an investment in bonds measured at amortized cost A. Increases the carrying amount of the investment B. Is the excess of interest income over interest received or receivable. C. Is recorded directly to the invesment account D. All of these
1. The amortization of a discount on an investment in bonds measured at amortized cost
A. Increases the carrying amount of the investment
B. Is the excess of interest income over interest received or receivable.
C. Is recorded directly to the invesment account
D. All of these
2. Which of the following statements is correct for an investment in term bonds that was acquired at a premium?
A. The amortized cost of the bonds increases annually.
B. The current and non current portions of the bonds as of the reporting date are reported separately.
C. The interest income recognized each year is higher than the amount of interest received/ receivable.
D. The effective interest rate is lower than the stated rate of the bonds.
3. The rate used in computing for interest receivable on debt instruments measured at amortized cost is the
A. Nominal rate
B. Effective interest rate
C. Yield rate
D. Celeb rate
4. The transaction costs of acquiring an investment measured at amortized cost are
A. Included in the initial measurement of the investment and amortized to profit or loss using the effective interest method.
B. Initiallt deferred and recognized in profit or loss only when the aaset is derecognized or becomes impaired.
C. Initially deferred and recognized directly in equity when the asset is derecognized or becomes impaired.
D. Expensed immediately on acquisition date.
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