Long Term Liabilities (Bond Amortization, Straight Line Method, Premium & Discount Amortization)

Описание: Accounting for issuing Bonds using the straight line method to amortize the discount or premium, amortize the discount or premium and charge it to interest expense over the period of time the bonds are outstanding, example for bond issued at a premium (bond sells for more than face value) Corp-A issued $800,000 of 10%, 20-year bonds on (1/1/20X1), at 102 (102% of par or face value), interest is payable semi-annually on (1/1) and (7/1), Corp-A uses the Straight-Line Method of amortization for bond premium or discount, example for bond issued at a discount, Corp-A issued $800,000 of 10%, 20-year bonds on (1/1/20X1), at 97 (97% of par or face value), interest is payable semi-annually on (7/1) and (1/1), Corp-A uses the Straight-Line Method of amortization for bond premium or discount, Straight-Line Method amortizes a constant amount each interest period (in this case 20 yrs x 2 x yr = 40 periods), detailed discussion by Allen Mursau