For each case of a financial asset that is not related to one another, explain (must be accompanied by an explanation) whether meeting the contractual cash flow test consists of only principal and interest: 1) Investments in debt instruments in the form of bonds with a specified maturity date. The bonds have a predetermined principal payment and interest on the principal amount payable is linked to the stock equity index on the stock exchange 2) Investments in debt instruments in the form of bonds from toll road management companies, whose contractual cash flows from these financial assets change according to the number of motorized vehicles that use certain toll roads. 3) Investments in debt instruments with a specified maturity date. A variable interest rate which gives the borrower the option of choosing a market rate of three months LIBOR for three months or one month LIBOR for one month

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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For each case of a financial asset that is not related to one another, explain (must be accompanied by an explanation) whether meeting the contractual cash flow test consists of only principal and interest:

1) Investments in debt instruments in the form of bonds with a specified maturity date. The bonds have a predetermined principal payment and interest on the principal amount payable is linked to the stock equity index on the stock exchange

2) Investments in debt instruments in the form of bonds from toll road management companies, whose contractual cash flows from these financial assets change according to the number of motorized vehicles that use certain toll roads.

3) Investments in debt instruments with a specified maturity date. A variable interest rate which gives the borrower the option of choosing a market rate of three months LIBOR for three months or one month LIBOR for one month

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