Question
Which of the following statements is true regarding the differences between amortized cost and fair value for debt investments? a. When bonds sold at a
Which of the following statements is true regarding the differences between amortized cost and fair value for debt investments?
a. When bonds sold at a premium and are accounted for using amortized cost, interest revenue will be less than the interest revenue recorded under fair value.
b. When bonds sold at a discount and are accounted for using amortized cost, interest revenue will be greater than the interest revenue recorded under fair value.
c. All of these answer choices are correct.
d. Under the fair value approach, an unrealized gain or loss is recorded in each year whereas no unrealized gains or losses are recorded under the amortized cost method.
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