The Residual Value Is Discounted as a Single Lump Sum

question 48

True/False

The residual value is discounted as a single lump sum because it will be received only once,when the asset is sold.

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Definitions:

Discount on Bonds Payable

The variance between the face value of a bond and the amount it is sold for when the sale price is beneath its face value.

Date of Issue

The date on which a financial instrument, such as a bond or stock, is made available for sale or issued.

Redemption

The process of paying off or buying back securities or debts by the issuer before their maturity date, often at a predetermined price.

Carrying Value

The book value of an asset, reflecting its original cost minus any depreciation, amortization, or impairment charges.