How does the amortization schedule for an installment note such as a car loan differ from an amortization schedule for bonds?
A)The final carrying value is zero in an amortization schedule for an installment note.
B)The final carrying value is zero in an amortization schedule for bonds.
C)The final carrying value is zero in both amortization schedules.

Question

Quizplus · Accepted Answer

The main difference is that the final carrying value for bonds does not necessarily have to be zero, as there may be a residual value or call option, whereas for an installment note such as a car loan, the final carrying value is generally zero since the loan is fully paid off at the end of the term.

How Does the Amortization Schedule for an Installment Note Such