Amortizing bond premiums over the period from the issue date to the maturity date reduces bond interest expense shown on the income statement.

Question

Quizplus · Accepted Answer

Amortizing bond premiums means spreading the premium amount over the term of the bond. This reduces the bond interest expense shown on the income statement as the premium is deducted from the face value of the bond.

Amortizing Bond Premiums Over the Period from the Issue Date