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General Accounting Discussions: Issuing bonds between interest dates

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  1.  
    • CommentAuthorcooliolum
    • CommentTimeJan 28th 2010
     
    I need some help on how to record the amortization of a bond when it is issued in between interest dates.
    For example, a bond is issued at a premium on Nov 1 and interest payments are on Aug 1 and Feb 1 with a Dec 31 year end.
    To record the Nov 1 entry for issuance of the bond I know I have to record 3 months interest in advance from the purchaser. and on interest payment date I will record full interest expense for a net 3 months interest paid.
    When it comes to the bond premium amortization, when should I start amortizing? Do I take a similar approach to the interest and record amortization in advance? or should I start from Nov 1? but if I start from Nov 1 then amortization and interest would be on different dates.

    Please help!
  2.  
    Its a very nice question but let me explain one thing that is the difference of bonds and their interest rates.
  3.  
    A good discussion can make your future and on this post i must say that your question is very good!

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