When bonds and other debt are issued, costs such as legal costs, printing costs, and underwriting fees are referred to as debt issue costs. When debt issue costs are incurred:

Question

Quizplus · Accepted Answer

Debt issue costs are amortized over the life of the debt, which effectively increases the interest expense beyond the stated interest rate, reflecting the increase in the effective interest rate.

When Bonds and Other Debt Are Issued, Costs Such as Legal