Answered: According to the PFRS, discount or…

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According to the PFRS, discount or premium on bonds payable may be amortized using the straight-line method.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 13GI

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The PFRS allows for the straight-line amortization of discount or premium on bonds due.
What are the two ways that discount and premium on bonds due are amortized? Each one should be explained.
what is the required method of amortizing discount and premium on bonds payable? Explain the procedures.
Amortizing the discount and premium on bonds is done in two ways. Describe each one.
Assuming the bonds are issued at a discount, explain how each column in an amortization schedule is determined. When bonds are issued at a premium, how does the amortization schedule differ?
Explain how each of the columns in an amortization schedule is calculated, assuming the bonds are issued at a discount. How is the amortization schedule different if bonds are issued at a premium?
In regard to a bond discount or premium, what is the straight-line amortization method?
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The premium on bonds payable account is shown on the balance sheet as A contra asset. A reduction of an expense. An addition to a long-term liability. A subtraction from a long-term liability.
How do we compute for the Carrying Value beginning of a Bonds Payable? of a Notes Payable?Are there differences in the amortization table for Bonds Payable and Notes Payable? State the differences.
The effective interest technique is used to charge a discount on a bond that is due to be paid to interest cost. true or false
What is the treatment of transaction costs from issuance to a bond payable measured using the effective interest method? Ignored Added to the initial cost Same as discount Same as premium