Amortize premium by interest method
[DOC File]1 - Cengage
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LO5 Amortize bond discounts and bond premiums using the straight-line and effective interest methods. The straight-line method allocates a fixed portion of a bond discount or premium each interest period to adjust the interest payment to interest expense. The effective interest method, which is used when the effects of amortization are material ...
[DOCX File]hahuzone.com
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As indicated in Chapter 6, companies must amortize premium or discount using the . ... discloses the effect of the premium amortization on the interest revenue Graff records each period using the effective-interest method. The entry to record interest revenue on July 1, 2009, is as follows. July 1, 2009.
[DOC File]Godgift
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34. When the effective-interest method is used to amortize bond premium or discount, the periodic amortization will. a. increase if the bonds were issued at a discount. b. decrease if the bonds were issued at a premium. c. increase if the bonds were issued at a premium. d. increase if the bonds were issued at either a discount or a premium. 35.
[DOC File]Joseph Company issued $800,000, 11%, 10-year bonds on ...
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Oct 19, 2010 · Interest is payable semiannually on June 30 and December 31. Joseph Company uses the straight-line method to amortize bond premium or discount. Instructions Prepare the journal entries to record the following. The issuance of the bonds. (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)
[DOC File]Professor Paul Zarowin - NYU Stern School of Business
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The standard way to amortize the premium or discount is the effective interest method. In the effective interest method, interest expense = the effective interest rate x NBV of the bond; thus bond discounts and premia are amortized at this same rate, and NBV always equals [the remaining coupons + principal] discounted at the original effective ...
[DOC File]ITS - Website Hosting - Personal/Professional | Western ...
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Let’s amortize the premium on the bonds at the first interest payment date. Interest (I) = Principal (P) × Rate (R) × Time (T) Interest Expense = Carrying Value × Market Rate × n/12 $4,290 = $107,260 × 4% × 12/12 If General Mills issued $100,000 face value, 6%, 4-year bonds for $93,376, the implied market interest rate is 8%.
[DOCX File]hahuzone.com
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Microchip continues to amortize the bond issue costs in the same way over the life of the bonds. Although the effective-interest method is preferred, in practice companies may use the straight-line method to amortize bond issue costs because it is easier and the results are not materially different.
Chapter 7
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]accountingreviewmaterials.files.wordpress.com
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34. When the effective-interest method is used to amortize bond premium or discount, the periodic amortization will. a. increase if the bonds were issued at a discount. b. decrease if the bonds were issued at a premium. c. increase if the bonds were issued at a premium. d. increase if the bonds were issued at either a discount or a premium. 35.
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