WebThe current and non-current asset classification depends on the company’s intended use. Overall, a bond can be an asset or a liability, depending on the party accounting for it. … WebDec 27, 2024 · The discount takes into account the risk of the bond and the creditworthiness of the bond issuer. A discount bond is offered at a lower price than the …
Bond Accounting Record Entries for Par, Discount & Premium Bonds
WebTo find the rate of return on the discount bond, we first need to calculate the bond's price when the market interest rate is 8% and then find the new price when the market interest rate drops to 6%. Afterward, we can compute the rate of return. Price of bond with 8% interest rate: P = FV / (1 + r)^n P = $1,000 / (1 + 0.08)^6 P ≈ $630.17. WebUnamortized Bond Discount is a contra-liability account. True False 16. If the market interest rate at the date of issuance of a bond exceeds the face interest rate, the bond will probably be sold at a discount. True False 17. A bond agreement is referred to as the bond indenture. True False 18. ff7 remake pc modding
Unamortized Bond Discount Definition - Investopedia
WebYou'll get a detailed solution from a subject matter expert that helps you learn core concepts. See Answer. Question: The Discount on Bonds Payable account is: A contra equity. An … WebDiscount on bonds payable is a contra account to bonds payable that decreases the value of the bonds and is subtracted from the bonds payable in the long‐term liability section of the balance sheet. Initially it is the difference between the cash received and the maturity value of the bond. WebBond interest expense for the current year ended December 31 is for a period of: ANSWER: Seven months. A bond was issued at a discount with a call provision. When the bond issuer exercised the call provision on an interest date, the amount of bond liability derecognized should have equaled the: ANSWER: Face amount less unamortized … dempsey best food