An Amortization Schedule for Bonds Issued at a Premium

question 154

Multiple Choice

An amortization schedule for bonds issued at a premium:

• A)Summarizes the amortization of the premium, a contra-asset account with a credit balance.
• B)Is reported in the balance sheet.
• C)Is a schedule that reflects the changes in the debt over its term to maturity.
• D)All of the above are correct.

---

Definitions:

Back-end Load

A fee paid by investors when they sell shares of a mutual fund, often decreasing over time the longer shares are held.

Annual Fees

Charges that must be paid yearly for membership or participation, often associated with credit cards, investment funds, and various types of subscriptions.

Futures

Financial contracts obligating the buyer to purchase an asset, or the seller to sell an asset, at a predetermined future date and price.

Options

Financial derivatives that provide the holder the right, but not the obligation, to buy or sell an asset at a predetermined price on or before a specific date.