Which of the Following Is a True Statement About the Accounting

question 167

Multiple Choice

Which of the following is a true statement about the accounting for long-term debt investments?

• A) The investment is initially recorded at cost.
• B) The cost includes any brokerage fees.
• C) Debt investments include investment in government and corporation bonds.
• D) All of these choices are correct.

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Definitions:

Principal Repaid

The portion of a loan payment that goes toward reducing the original loan amount, as opposed to the portion that goes toward paying interest.

Interest Paid

The amount paid over a period for borrowing money, typically expressed as an annual percentage rate.

Loan

A sum of money that is borrowed and is expected to be paid back with interest.

Asset's Market Value

The current price at which an asset can be bought or sold in a marketplace, reflecting the value assigned to it by the market participants.