Which of the following is a major difference when accounting for long-term debt

Question

Which of the following is a major difference when accounting for long-term debt investments versus short-term debt investments?

A) Interest revenue is not recognized for long-term investments.
B) For short-term investments, bond premium or discount is not amortized to interest revenue.
C) At the end of the year, any unrealized gain or loss on long-term debt investments must be recognized in the stockholders' equity section of the balance sheet.
D) When selling long-term investments, no gain or loss is recognized.

Explanation / Answer

B) For short-term investments, bond premium or discount is not amortized to interest revenue.

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