Under the Original Issue Discount (OID) Rules as Applied to a Three-Year

Multiple Choice

Under the original issue discount (OID) rules as applied to a three-year certificate of deposit:

A) All of the income must be recognized in the year of maturity.
B) The OID will be included in gross income for the year of purchase.
C) The interest income for the first year will be less than the interest income for the third year.
D) The original issue discount must be amortized using the straight-line method.
E) None of the above is correct.