Under the Original Issue Discount (OID)rules as Applied to a Three-Year

question 75

Multiple Choice

Under the original issue discount (OID) rules as applied to a three-year certificate of deposit:

• A)All of the income must be recognized in the year of purchase.
• B)The OID will not be included in gross income until the end of the third year.
• C)The interest income for the first year will be greater than the interest income for the second year.
• D)The original issue discount must be amortized using the effective interest method.
• E)None of the above is correct.

---

Definitions:

Approach-Avoidance Conflict

A psychological conflict that occurs when a goal is both appealing and unappealing at the same time, leading to ambivalence.

Positive and Negative Aspects

Factors or elements of a situation, decision, or phenomenon that can be beneficial (positive) or detrimental (negative).

Emotion-Focused Coping

A coping strategy where individuals try to manage their emotions in the face of stressors, rather than confronting the problems directly.

Stressor

Any event, experience, or environmental stimulus that causes stress in an individual.