Concept explainers
Bonds:
Bonds are financial instrument, generally issued to raise debt usually for projects which require large amount of funds, with an assurance to repay the sum with applicable interest.
Par value of bonds:
Par
Carrying value of bond
Carrying value of bonds is the sum total of face value of bond after unamortized premium and deducting amortized discounts.
Premium on bonds:
A bond is said to be issued on premium when the issue price is more than par value of bond.
a.
To identify: Par value and book value of bonds.
b.
To identify: if Bonds are sold at premium or discount.
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Financial and Managerial Accounting
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