Bond+Premium+Amortization - difference of $35,533(the...

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Bond Premium Amortization Why does bond premium amortization decrease interest expense? On Slide 13, bonds with a par value of $700,000 are issued for $735,533. Although the company received $735,533, the company is required only to repay $700,000. Therefore, the
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Unformatted text preview: difference of $35,533 (the amount of the premium) is in effect a partial refund by the bond investors of future interest payments of the company. For the bond investor, the same reasoning results in interest revenue less than the cash received for interest....
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