Which of the following is not true regarding serial bonds?
A) Serial bonds come due in installments.
B) Serial bonds are amortized using the effective interest method only.
C) Serial bonds are amortized using the bonds outstanding method and the effective interest method.
D) Serial bonds may sell at a discount or premium.

Question

Quizplus · Accepted Answer

Serial bonds can be amortized using either the bonds outstanding method or the effective interest method. Both methods result in different amounts of interest and principal payments for each installment. Therefore, serial bonds may be sold at a discount or premium depending on the market interest rates.

Which of the Following Is Not True Regarding Serial Bonds