The Carrying Amount of Bonds at Maturity Is Always Equal

question 58

Multiple Choice

The carrying amount of bonds at maturity is always equal to:

• A) the amount of cash originally received in exchange for the bonds.
• B) the par value that the issuer pays the holder.
• C) the amount of discount or premium.
• D) the amount of cash originally received in exchange for the bonds plus any unamortized discount or less any premium.
• E) $0.

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Definitions:

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life evenly.

Depreciation Expense

Assigning the cost of a solid asset across its useful lifespan.

Journal Entry

A record of financial transactions in the accounting books, showing accounts affected, amounts, and date.

Depreciable Cost

The total cost of a fixed asset that is allocated to depreciation expense over the asset's useful life, calculated as the asset's cost minus its salvage value.