Long-term debt instruments held to earn interest income are recorded as
A) current assets at amortized cost.
B) non-current assets at amortized cost.
C) current asset at fair value.
D) non-current assets at fair value.

Question

Quizplus · Accepted Answer

Long-term debt instruments held to earn interest income are classified as non-current assets because they are not expected to be sold or realized within one year. They are recorded at amortized cost, which reflects the acquisition cost adjusted for amortization of discount or premium, if any, over the period until maturity. This method aligns with the intention to earn interest income over the term of the instrument rather than to profit from short-term price fluctuations.

Long-Term Debt Instruments Held to Earn Interest Income Are Recorded