binding contract, contract, secure @ Pixabay

Under FASB 133, the premium or discount on a bond should be amortized to comply with. This means that if you buy a $1,00 face value bond for $980 in an environment where bonds are trading at par (100), then you will have to amortize the difference of $20 over the life of the bond. The total interest expense and carrying costs will be recorded evenly over time. This difference is amortized to comply with FASB 133. This means that if you buy a $100 face value bond for $980 in an environment where bonds are trading at par ($100), then you will have to amortize the difference of $20 over the life of the bond. The total interest expense and carrying costs will be recorded evenly over time. – – – — Amortizing Bond Discount to Comply with FASB 133 Under FASB 133, the premium or discount on a bond should be amortized so that total interest expense and carrying costs are recorded evenly over time. This means that if you buy a $100 face value bond for $980 in an environment where bonds are trading at par ($100), then you will have to amortize the difference of $20 over the life of the bond. The total interest expense and carrying costs will be recorded evenly over time. __ – – __-__-_–__ *Note: there is no bullet point here*

LEAVE A REPLY

Please enter your comment!
Please enter your name here