Bond discount should be amortized to comply with

Question

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The expense recognition principle requires that expenses be recognized during the period in which they are incurred, rather than solely in the period in which they are paid. Amortizing the bond discount involves spreading the cost of borrowing over the life of the bond, which is in line with the expense recognition principle. The historical cost principle requires that assets be recorded at their original cost, conservatism involves being cautious in recognizing revenue and assets, and revenue recognition principle involves recognizing revenue when earned. The expense recognition principle requires that expenses should be recognized in the same period in which the related revenue is recognized. Amortizing bond discount over the life of the bond ensures that the interest expense recognized each period reflects the actual cost of borrowing and complies with the expense recognition principle.

Bond Discount Should Be Amortized to Comply with