If a long-term bond investment is sold before maturity, an entry must be made to update any unrecorded interest and amortization of the discount or premium.

Question

Quizplus · Accepted Answer

Selling a long-term bond investment before its maturity requires an update in the accounting records to recognize any unrecorded interest income and to adjust for the amortization of the bond's discount or premium, ensuring that the financial statements accurately reflect the bond's carrying value at the time of sale.

If a Long-Term Bond Investment Is Sold Before Maturity, an Entry