Amortization of bond premium gaap
[DOC File]BONDS & L-T NOTES
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The following tables were generated from the bond amortization template. Alternative A: Bond Principal $1,000,000 Coupon Interest Rate 12.5% Market Interest Rate 12.0% Amortization Table Year Period Bond Carrying Amount at Start of Year Interest . Expense Bond (Premium) Discount Amortization Premium (Discount) Balance Bond Carrying Amount
Chapter 7
a. Under the straight-line method, the premium to be amortized in each period equals the bond premium divided by the number of interest payments during the life of the bond. b. The effective interest method is applied to the amortization of bond premiums in almost exactly the same way as it is applied to the amortization of bond discounts.
[DOC File]CHAPTER 1
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Interest Payment $8,000,000 Less Amortization of premium ($500,000) Interest Expense $7,500,000 In contrast, the effect on cash is an outflow of $8 million. The reduction of the interest expense for the amortization of bond premium is a noncash item, which reflects the fact that part of the annual outflow of interest is merely a return of ...
[DOC File]Chapter 3
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Included in the computation of net income were: depreciation expense, $45,000; amortization of a patent, $24,000; income from an investment in common stock of Linda Inc., accounted for under the equity method, $36,000; and amortization of a bond premium, $9,000.
[DOC File]Godgift
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- Amortization of bond premium (2,000) + Increase in deferred income taxes payable 15,000 - Gain on sale of securities (20,000) - Gain on sale of equipment (5,000) - Increase in accounts receivable, net (90,000) - Increase in inventories (115,000) - Decrease in accounts payable and . accrued expenses (63,000) Net cash flow provided by ...
[DOC File]Chapter 3
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7. Amortization of a premium increases bond interest expense, while amortization of a discount decreases bond interest expense. 8. A bond may only be issued on an interest payment date. 9. The cash paid for interest will always be greater than interest expense when using effective-interest amortization for a bond. 10.
[DOC File]godgiften.weebly.com
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If the bond is issued on 1/1/2000 and has a maturity date of 12/31/2009, determine the price at which the bond will be issued. Interest is paid semi-annually. Q1B Repeat, assuming the coupon rate is 9.5%. How is the interest expense determined for a bond? What are the two methods? What is meant by "amortization" of premium or discount? Why is ...
Why is bond premium amortization recorded as an operating activi…
method used to amortize bond premium under GAAP) to amortize the bond premium semiannually Ultimately, he will report $599 of interest income from the bond. The amortization table below reflects the required calculations:
[DOC File]CHAPTER 1
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Unlike changes in interest payable, the amortization of bond discount or premium is a difference between interest expense recognized and cash paid. (difficult, L.O. 4, Section 3, false) Any change in the principal amount of debt during the year that is not explained by issuances or repayments is due to amortization. (moderate, L.O. 4, Section 3 ...
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