Test 3-Bonds and redemption pt.3

Question 1

The __________ & ______, however, change each year.

This is because the carrying amount (book value) of the note _____ each year as principal is repaid, which _____the interest component the next period.

Answer 1

interest and principal repayment

decreases

Question 2

After the final payment, the carrying amount on the note is ___, indicating that the note has been paid in full.

Answer 2

zero