Bond Issue Costs

question 91

Multiple Choice

Bond issue costs

• A)should be amortized by the straight-line method to interest expense
• B)should be included in bond discount or subtracted from bond premium and amortized by the effective interest method
• C)should be subtracted from bonds payable on the balance sheet
• D)should not be amortized and should be written off at bond retirement

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Definitions:

Margin

The difference between the selling price of a good or service and the cost of producing it, often expressed as a percentage of the selling price.

Return on Investment

A measure of the profitability of an investment, calculated as a percentage of the return relative to the investment's cost.

Investment Opportunity

A potential financial venture or asset purchase that could yield returns in the future.

ROI

Return on Investment, a metric used to evaluate the efficiency of an investment or compare the efficiency of several different investments.