Amortizing a discount on a long-term bond investment will cause:

Question

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Amortizing a discount on a long-term bond investment means that the investor is slowly reducing the discount amount as an adjustment to interest revenue over the life of the bond. This increases the interest revenue reported on the income statement, which could exceed the actual cash received by the investor in that year. Therefore, the interest revenue reported on the income statement is likely to exceed the cash received by the investor.

Amortizing a Discount on a Long-Term Bond Investment Will Cause