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Exercise 10-8 (Static) Straight-line: Recording bond issuance and premium amortization LO P3

Options:
a) Amortization of bond discount
b) Equity issuance accounting
c) Calculating dividend yield
d) Treasury stock transactions

1 Answer

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Final answer:

A bond is similar to a bank loan in terms of borrowing money and making interest payments, but there are also differences such as the issuer and predetermined terms.

Step-by-step explanation:

A bond is similar to a bank loan in that both involve borrowing money and making periodic interest payments. However, there are also differences between the two. For example, a bond is typically issued by a corporation or government entity, while a bank loan is obtained from a financial institution. Additionally, the terms and conditions of a bond, such as the interest rate and maturity date, are predetermined, whereas a bank loan may have more flexible terms negotiated between the borrower and lender.

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