Bond discount occurs when a bond is issued for an amount that is less than its face amount. This form shows you how to spread that discount over the life of the bonds by using the method preferred by the accounting profession. When the amount of discount is significant, the effective interest method is actually required.
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For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.
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