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Unformatted text preview: do not pay interest.
IInstead, they offer a return in the
form of a deep discount from the
orm of a deep discount from the
ace amount. The StraightLine Method – A Practical Expediency 14-9 Using the straight-line method of amortizing discounts and
premiums, the discount in the earlier illustration would be
allocated equally to the 6 semiannual periods (3 years):
$33,367 ÷ 6 periods = $5,561 per period
At Each of the Six Interest Dates Masterwear (Issuer)
Discount on bonds payable
Discount on bond investment
Investment revenue 47,561
47,561 14-10 Debt Issue Costs
Registration Promotion 14-11 LongTerm Notes Company
Payable) Bank Property, goods,
The liability, note payable, is reported at its present value,
similar to the accounting for bonds payable. 14-12 Insta...
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- Spring '08