Bond Amortization (Bond Issue Costs Amortization Using Effective Interest Rate & Method)

Описание: Accounting for bond issue costs as long term asset as a deferred charge which is amortized over the life of the bond using the effective interest method, example is for Corp-A issued $3 mil of 10%, 10-year bonds on (1/1/20X1), at 97 (97% of par or face value), interest is payable semi-annually on (1/1) and (7/1), Legal & other costs incurred of $50,000, Corp-A uses the Effective Interest Method of amortization for bond premium or discount and any deferred charges for bond issue costs (Legal, commissions, fees, etc.), bond issue costs are amortized and realized as bond issue expense on the income statement, the bond discount is amortized separately and realized as bond interest expense on the income statement, detailed accounting by Allen Mursau