Week Three DQ 1
Please post a 150-300-word response to the following discussion
question by clicking on Reply.
What is the straight-line method of
amortizing discount and premium on bonds payable? Provide an explanation of the
process.
TUTORIAL PREVIEW
For example, a company sold $500,000, 10-year, 10% bonds on January
1, 2013, for $480,000. Interest is payable on January 1.
The bond discount would be ($500,000 - $480,000) $20,000.
The bond discount amortized over 10 amortization periods is ($20,000/
10) $2,000
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