Compare the accounting for a bond investment and a bond payable (Appendix 12A).

Question

Quizplus · Accepted Answer

The Answer is The accounting for a bond investment is similar to that of a bond payable in that any premium or discount is amortized using the effective-interest method of amortization. Companies using ASPE can choose to use the straight-line method instead if the results do not materially differ from the effective-interest method. Premiums and discounts are not amortized for non-strategic investments that are held for trading purposes and would normally be accounted for under the fair value through profit or loss model.

Compare the Accounting for a Bond Investment and a Bond