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Any premium or discount on a long-term debt investment is amortized?
Wiki User
∙ 9y ago
Yes, at the end of the year you take the difference between the interest revenue gained and what would have been gained if the investment had the present value interest. For a discount, the difference will be credited against the discount received.
Wiki User
∙ 9y ago
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When an interest-bearing note matures what is the balance in the notes payable account?
The principal or maturity value. The premium or discount should be fully amortized down to zero.
When an interest-bearing note matures the balance in the Notes Payable account is?
The principal or maturity value. The premium or discount should be fully amortized down to zero.
What is the effect of a raise in discount rates?
Discount rate = inflation expectation + risk premium for the investment, so when inflation goes up, your discount rate should go up
When effective interest method is used to amortize bond premium or discount the periodic amortization will be?
increasse if the bonds were issued at either a discount or premium.
Components of discount rate?
discount rate is formed from three main components:the first is the interest rate which is the reward of delaying consumption.the second component is inflation rate, by which the purchasing power of money declines, and the third is risk premium which is related to the specifications of the investment case
Why the discount bond is not a bargain?
Because the rate of return it is still a function of market influences. Whether a bond is premium or discount is merely a reference of the coupon rate vs the real market interest rate. If the issuer sets their coupon rate below the market rate, it is said to be discounted. Set the coupon rate above the market interest rate and it is said to be premium. An invester pays below face value for a discount bond and above for a premium. In the end, the invester receives a return on their investment that aligns with the real market interest rates. Premium vs Discount is merely a reference point from where you start - you still end up in the same place.
How a forward premium or discount is computed?
forward exchange rate can be computed from spot exchange by adding or subtracting premium ir discount. also forward rate can be at forward premiun of discount when comapred to spot exchange rate.
What is the opposite of discount?
The opposite of "a discount" (reduction in price) would be a premium or surcharge. The opposite of the verb discount (dismiss) could be credit, accept,or consider.
What is the credit rating?
Premium Investment Grade is the highest credit rating.Prime Investment Grade: No Risk of DefaultRating AgencyRatingS&PAAAMoodyAaaFitchAAA
What is the highest rate?
Premium Investment Grade is the highest credit rating.Prime Investment Grade: No Risk of DefaultRating AgencyRatingS&PAAAMoodyAaaFitchAAA
What is the highest credit rating?
Premium Investment Grade is the highest credit rating.Prime Investment Grade: No Risk of DefaultRating AgencyRatingS&PAAAMoodyAaaFitchAAA
What exactly is a no claims discount?
A no claims discount is given by auto insurance companies. If a policy owner files no claims for usually 5 years, a discount is given towards the insurance premium.
