A High Yield Bond

question 42

Multiple Choice

A high yield bond

• A)pays no interest
• B)pays interest only at maturity
• C)is a high-risk debt instrument
• D)is a bond in default

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Definitions:

Depreciation Expense

An accounting method used to allocate the cost of a tangible asset over its useful life.

Journal Entry

A journal entry in accounting is a record of a financial transaction, entering it into the accounting records of a business.

Book Value

The net value of an asset or liability according to its balance sheet account balance, calculated as original cost minus depreciation, amortization, or impairment costs.

Straight-Line Method

A depreciation technique that allocates an equal portion of the initial cost of an asset to each year of the asset's useful life.