The entry to record the issuance of bonds at a premium includes a credit to the Unamortized Bond Premium account.

Question

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When bonds are issued at a premium (i.e. for a price above their face value), the premium is not immediately recognized as income. Instead, it is amortized over the life of the bonds and recorded as a credit to the Unamortized Bond Premium account. Therefore, when the bonds are initially issued, a credit is made to this account to reflect the premium received.

The Entry to Record the Issuance of Bonds at a Premium