When a bond investment is sold (issued) at a discount, subsequent amortization of the discount does which of the following?

Question

Quizplus · Accepted Answer

When a bond investment is sold at a discount, the amortization of the discount increases interest expense. This is because the initial bond price was less than its face value, and as the bond approaches maturity, the discount needs to be gradually amortized, which increases the interest cost over time.

When a Bond Investment Is Sold (Issued) at a Discount