Answer:
A Mortgage Backed Bond is:
e. A loan in which security interest in real estate is granted by a borrower.
Explanation:
A mortgage backed bond is tied to or secured on a real estate asset. This implies that the bond is not just a promise to pay a debt obligation but the attached promise is secured or backed by some real assets. There is extra security provided for the bond because specific assets are identified as securities for the bond. Since the bonds are associated with some real assets, the assets can be traded in the event that the debt obligations are not met.
We
should note that the bond investment account is recorded at cost by the Bondholder
or Investor.
The
cost or price is calculated as:
Cost
= $90,000 * 86.4%
Cost
= $90,000 * 0.864 = $77,760
Therefore,
the entry to record should be:
<span>debit
Held-to-Maturity Investment in Bonds for $77,760 and credit Cash for $77,760</span>
From my research, Skills USA is the most hands on when it comes to that kind of stuff.
I personally think the answer is C
AICPA: <span>The national professional organization of practicing Certified Public Accountants (CPAs), whose various committees and boards have been an important contributor to the development of GAAP.
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