Amortization of a bond discount

Name: Amortization of a bond discount
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Amortization of bond discount involves allocating the amount of the discount over the life of the bond, which results in a decrease in the carrying value of the bond (not the Bonds Payable account itself). This is done by increasing the interest expense and crediting the Discount on Bonds Payable account. Over time, the balance in the Discount on Bonds Payable account reduces to zero as the bond approaches maturity.

Amortization of a Bond Discount