If a held-to-maturity debt security is purchased at a discount,the discount must be amortized when the interest revenue is earned.

Question

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When a held-to-maturity debt security is purchased at a discount, the discount must be amortized over the life of the security and allocated to interest revenue as earned. This is done in order to recognize the discount as interest income over the life of the security instead of recognizing it all at once when the security is sold or matures. Therefore, the statement given in the question is true.

If a Held-To-Maturity Debt Security Is Purchased at a Discount,the