Bond discount amortization is the process through which bond discount is written off over the life of the bond. There are two primary methods of bond amortization: straight-line method and effective interest rate method.
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A company has a $1,000,000 bond issue outstanding with unamortized premium of $10,000 and unamortized issuance cost of $5,300. What is the book value of its liability? If an affiliate purchases half the bonds in the market at 98, what is the gain or ...
(TheseareBalancesasof5/1/06)BondsPayable$100,000PremiumonBonds1,785BondIssueCosts630Determinethefollowing:1.MonthlyAmortizationoftheBondPremium2.MonthlyAmortizationofBondIssueCosts3.InterestPaymentDates4.CarryingValueoftheBondson6/30/06assumingthatallamortizationisuptodate.5.Thegainorlossonthesebondsassuming...
For both bond premiums and discounts, the company will have to make an initial journal entry when the bonds are sold that records the cash received and the discount or premium given. In both cases, bonds payable will be credited for the total face value of the bonds. Using the previous ...