Acct 302

Which of the following statements regarding the initial recognition of debt investments is correct?

All debt investments are initially recorded at cost.

Equity and debt securities are commonly referred to as. instruments.

Financial

If a bond sells for more than its maturity value, the bond sells at a

Premium

If the market rate of interest rises after a bond is purchased, the bond incurs

an unrealized holding loss

If an investor has the positive intent and ability to hold a debt security until it matures, it should be classified as a(n)

held-to-maturity security.

The price of a bond is equal to the

present value of future cash receipts.