Explain the amortization of a bond premium. Identify and describe the amortization methods available.
What will be an ideal response?
A bond premium occurs when bonds are sold for more than their par value. The bond
premium represents a reduction in the amount of interest owed over the life of the bond. A bond premium is amortized over the life of the bond. One method of amortizing the bond premium is the straight-line method. The premium amortized each period is the original premium divided by the number of interest periods. Bond interest expense each period is the cash interest payment less the premium amortized. Another method is the effective interest method. In this case the bond interest expense is calculated by multiplying the bonds beginning-of-the-period carrying
value by the market interest rate for the bonds at issuance.
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Which of the following statements is not an example of local products or brands?
A) Coca-Cola developed several branded drink products for Japan. B) Coca-Cola markets Kinely brand bottled water in India. C) BMW uses "the ultimate driving machine" slogan in India. D) Diageo PLC markets Gordon's Edge, a gin-based ready-to-drink beverage in the United Kingdom. E) Coca-Cola developed a noncarbonated, ginseng-flavored beverage for Japan.
Current issues facing the labor movement in Great Britain include:
A. Increasing union density B. Employer demands for greater flexibility C. Increasing political influence of union D. Declining employer bargaining power
The use of high-velocity automated decision making eliminates the risk inherent in human decision making
Indicate whether the statement is true or false
The audit committee of an entity subject to SEC regulation will do all of the following except:
A. Be responsible for agreeing to fee compensation of the independent audit firm. B. Serve as liaison between the board of directors and the independent audit firm. C. Certify the annual financial statements. D. Approve non-audit services provided by the independent audit firm. E. Be comprised only of individuals who are not members of management.