If a bond is bought at a discount, the amortized book value of the bond investment will increase as the bond approaches maturity.

Question

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When a bond is bought at a discount, it means the purchase price is less than the face value of the bond. As the bond approaches maturity, the difference between the purchase price and face value (the discount) is gradually amortized over the remaining life of the bond. This means that each period, a portion of the discount is added to the book value of the bond. As a result, the amortized book value of the bond investment will increase over time, eventually reaching the face value of the bond at maturity.

If a Bond Is Bought at a Discount, the Amortized