There are two basic methods of bond discount amortization for tax purposes: the straight-line amortization and the effective-interest-rate amortization methods. Under the straight-line method, the amount of periodic amortization is equal to the total bond discount divided by the number of interest-p...
In operating activities as an addition to income. 正确答案:D 分享到: 答案解析: Choice "D" is correct. Bond discount amortization is a non-cash item that increases interest expense and therefore decreases net income. When preparing the statement of cash flows using the indirect method, the am...
It has to pay the $100,000 (face value of the bond) after 3 years (the maturity of the bond). So, $100,000 were credited to the account “Bonds Payable”. In the “Discount on Bonds Payable” account, the discounted amount of the bond is adjusted. It is a liability account and ...
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The first step in the straight-line method of amortization of bond premium income is to subtract the bond face value from the amount paid to calculate the premium. For example: $10,500 - $10,000 = $500 If there are 36 months left before the bond matures, then to find the amortized...
The bond discount of $3,000 is amortized over the life of the bond and is recorded as an interest expense. The amortization will make the bond's book value increase from $97,000 in year one to $100,000 just as it matures. 1. Determine the Bond Interest Payments ...
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Dividendspayableare dividends that have been declared to be awarded to shareholders but have not yet been paid. Long-term debtcan include a variety of obligations, including sinking bond funds, mortgages, or other loans that are due in their entirety in more than one year. ...