What type of account is unamortized bond discount?
unamortized bond discount definition. A contra liability account containing the amount of discount on bonds payable that has not yet been amortized to interest expense.Click to see full answer. Also asked, what type of account is bond discount? liability Furthermore, how do you calculate unamortized bond discount? To figure out how much you can amortize…
unamortized bond discount definition. A contra liability account containing the amount of discount on bonds payable that has not yet been amortized to interest expense.Click to see full answer. Also asked, what type of account is bond discount? liability Furthermore, how do you calculate unamortized bond discount? To figure out how much you can amortize each year, you take the unamortized bond premium and add it to the face value. Then multiply the result by the yield to maturity, and subtract it from the actual interest paid. For the first year, the unamortized bond premium is $80, so you would multiply $1,080 by 5% to get $54. Hereof, is a bond discount an asset? Breaking Down Unamortized Bond Discount The discount refers to the difference in the cost to purchase a bond (it’s market price) and its par, or face value. The issuing company can choose to expense the entire amount of the discount or can handle the discount as an asset to be amortized.What is unamortized bond premium? DEFINITION of Unamortized Bond Premium Unamortized bond premium refers to the amount between the face value and the amount the bond was sold at, minus the interest expense. It is what remains of the bond premium to be written off against expenses over the bond’s life.
