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New Investor’s Guide to Premium and Discount Bonds

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The discount or premium on a bond gradually declines to zero as the bond’s maturity date approaches, at which time the bond returns to its investor the full face value at issuance. Absent any unusual circumstances, the shorter the time until a bond’s maturity, the lower the potential premium or discount.

Actived: Saturday Sep 1, 2018

Link: https://www.thebalance.com/premium-vs-discount-bonds-417066

Bond Premium with Straight-Line Amortization

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By reducing the bond premium to $0, the bond's book value will be decreasing from $104,100 on January 1, 2018 to $100,000 when the bonds mature on December 31, 2022. Reducing the bond premium in a logical and systematic manner is referred to as amortization .

Actived: Sunday Aug 8, 2010

Link: https://www.accountingcoach.com/bonds-payable/explanation/5

How to Account for Discounted Bonds - dummies

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Here is the schedule of bond discount amortization for this issuance. The journal entry to record Year 1 is to debit interest expense for $9,635. The credits go to discount on bonds payable for $2,635 and cash for $7,000.

Actived: Monday Feb 18, 2019

Link: https://www.dummies.com/business/accounting/how-to-account-for-discounted-bonds/

Amortizing a Bond Premium

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An example is provided to illustrate how to calculate the bond proceeds, premium, interest expense, amortization of the bond premium, and the carrying value of the bonds. Edspira is your source

Actived: Monday Feb 4, 2019

Link: https://www.youtube.com/watch?v=meaqidbXHRY

Bonds: Discount and Premium - Module 2: Long-Term Debt

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In this module, you will be introduced to the concept of long-term debt. You will learn about the different types of bonds and how each type results in different accounting, including bonds sold at a premium, sold at a discount, and sold with issuance costs attached.

Actived: Thursday Dec 31, 2015

Link: https://www.coursera.org/lecture/accounting-analysis-2-liabilities/bonds-discount-and-premium-FWFJd

Accounting For Bonds Payable - principlesofaccounting.com

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One simple way to understand bonds issued at a premium is to view the accounting relative to counting money! If Schultz issues 100 of the 8%, 5-year bonds when the market rate of interest is only 6%, then the cash received is $108,530 (see the previous calculations).

Actived: Monday Feb 18, 2019

Link: https://www.principlesofaccounting.com/chapter-13/accounting-bonds-payable/

Premium Vs. Discount Bonds | Finance - Zacks

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A bond with a price below 100 is a discount bond, while price above 100 means the bond is premium. Bond prices move in the opposite direction of interest rates: When interest rates rise, bond

Actived: Friday Feb 15, 2019

Link: https://finance.zacks.com/premium-vs-discount-bonds-2602.html

Bond Discount or Premium?

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Bond discount and premium calculation basics and the resulting after tax costs. Get more answers at our forum for finance and accounting at passingscoreforum.com.

Actived: Wednesday Jan 16, 2019

Link: https://www.youtube.com/watch?v=b33S2EU-FvU

Unamortized bond discount — AccountingTools

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The bond issuer writes off the full amount of the bond discount over the remaining term of the bond with which it is associated. The amount written off is charged to interest expense . The amount of the bond discount that has not yet been written off is called the unamortized bond discount.

Actived: Monday Feb 18, 2019

Link: https://www.accountingtools.com/articles/2017/7/4/unamortized-bond-discount

Accounting for bonds — AccountingTools

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Interest Payments. The recorded amount of interest expense is based on the interest rate stated on the face of the bond. Any further impact on interest rates is handled separately through the amortization of any discounts or premiums on bonds payable, as discussed below.

Actived: Tuesday Feb 19, 2019

Link: https://www.accountingtools.com/articles/2017/5/17/accounting-for-bonds

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