what is the required method of amortizing discount and premium on bonds payable? Explain the procedures.

Q: e the incremental method to record the issuance of the bonds and warrants.

A: Solution Working note Method to be used         =incremental method to record the issuance of the…

Q: How would the balance of the discount on bonds payable account usually be reported in the balance…

A: Definition:   Bonds payable account: The account which holds the total liability to be paid to the…

Q: In what ways do bonds amortize their discount and premium? Each one is explained in detail.

A: Solution concept Discount and premium bond               When the coupon rate of interest is greater…

Q: Define bonds payable.

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: What is the difference between general obligation bonds and revenue bonds?

A: General Obligation Bonds(GOs) are bonds that are backed by the "full faith and credit" of the issuer…

Q: How should discount on bonds payable be reported on the financial statements? Premium on bonds…

A: Concept: A premium on bonds occurs if, the bonds are issued at a high price than the face value. On…

Q: What are the contract rate and the market rate for bonds?

A:

Q: T or F A discount on bond payable is charged to interest expense using the effective interest…

A: Effective interest method - The effective interest method is a technique used to amortize a bond…

Q: What is the principal repayment for a bond

A: There are two components principal and interest

Q: When using the effective−interest amortization method for​ bonds, the amount of the interest expense…

A: The Effective−Interest Amortization Method : It is the method in which Interest expenses is…

Q: Explain why bonds are issued and identify the types of bonds?

A: Bonds are one method for corporations to generate funds. The investor undertakes to contribute the…

Q: Define the following Bond related terms: Issue Date Face Amount Term Contract Rate Payment Frequency…

A: Bonds refers to the security issued by corporate companies or government as and when they need to…

Q: Explain face amount, discount, and premium relating to bond issuance.

A: Face value is also known as par value. Face amount of bond issuance is the amount on which coupon…

Q: The PFRS allows for the straight-line amortization of discount or premium on bonds due

A: Introduction: The PFRS provides for the amortization of discount or premium on bonds payable in a…

Q: When does a discount on bonds payable occur?

A: Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various…

Q: What amount of interest is expensed on a bond interest payment?

A: Whenever an interest payment is made on bonds, amount of interest expensed : Interest expensed =…

Q: How to calculate interest on bonds and how to journalize the interest.

A: Interest on bonds is computed on the basis of the rate mentioned on the bond on the face value of…

Q: What loss should Mirada record on the redemption of bonds?

A: Bonds are the financial instruments which shows the amount of ownership of debt in a business…

Q: What type of account is Premium on Bonds Payable? What is its normal balance? Is it added to or…

A: Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various…

Q: Discuss in brief the types of collateralized debt Obligation. Please explain in details.

A: Solution-  Collateral Debt Obligation [CDO] is a sophisticated project financing outcome that's also…

Q: What type of account is Discount on Bonds Payable? What is its normal balance? Is it added to or…

A: Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various…

Q: Discuss different types and characteristics of debt instruments with specific reference of Bonds.

A: Corporate bond- It is a bond issued by a company to fund its business operations, major expansions,…

Q: Why discount and premium on issue of bonds is amortized?

A: Bonds are intangible assets, the amortization is similar to depreciation, it means systematically…

Q: credit to Premium on Bonds Payable?

A: Premium on Bonds Payable is the amount at which it is issued in excess of par value. Premium on…

Q: What is the structure of Collateralized debt obligation. Please explain in details

A: A collateralized debt obligation also known as CDO is a complex structured credit product which is…

Q: How does accrued interest on a bond affect the purchase price?

A: Interest on bond is normally paid semi annually. When a bond is transferred in between these…

Q: Compute bond proceeds, amortizing premium by interest method, and interest expense

A:

Q: The journal entry a company records for the payment of interest, interest expense, and amortization…

A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…

Q: What are the two ways that discount and premium on bonds due are amortized? Each one should be…

A: Solution Two ways that discount and premiums on bond are amortized are as flows Straight line method…

Q: Which costs are included in bond issuance costs? How are they recorded?

A: Bonds:   Bonds are long-term promissory notes that are represented by a company while borrowing…

Q: Amortizing the discount and premium on bonds is done in two ways. Describe each one.

A: Amortization means the reduction in the amount of liability due to write offs over a regular period.

Q: What is premium on bonds payable?

A: Bonds: Bonds are long-term promissory notes that are issued by a company while borrowing money from…

Q: How do premiums and discounts on long-term debt securities affect interest expense?

A: Long term debts are used by the large organisations to raise the fund and utilise them for various…

Q: How is the purchase of held-to-maturity debt security at face value recorded?

A: Hold-to-maturity Debt:  These are the investment in debt securities, where the investor wishes to…

Q: Describe the nature of bonds and indicate the accounting for bond issuances.

A: Capital market:   A capital market is a place where the shares and bonds are traded. This helps a…

Q: a. What is the discount or premium from the issuance of the bonds payable? Indicate whether…

A:

Q: Determine the selling price of the bonds

A: The selling price of the bonds is the present value of the cash payments to be made during the life…

Q: If bonds issue at a premium, what happens to the carrying value of bonds payable and the amount…

A: Required  If bonds issue at a premium, what happens to the carrying value of bonds payable and the…