Question

When a bond is sold at a discount, the ________ value will increase at each semi-annual interest payment by the amortization of bond discount.

Answer 1

When a bond is sold at a discount, the interest expense value will increase at each semi-annual interest payment by the amortization of bond discount

Step-by-step explanation:

Issue of Bonds at a discount means the bonds are issued at less than face value amount and are redeemable at par. The difference between the face value and issue price is the discount.

Such discount is to be amortized over the life of such bonds.

The journal entry being,

Interest Expense A/C Dr.

To Discount On Bonds Payable

Hence, the interest expense turns out to be actually greater than the interest company actually paid to investors over the life of such bonds.

Answer 2

Carrying value

Step-by-step explanation:

Carrying value or book value- it is referred to that value that is considered to be purchase value according to the balance sheet of the company. carrying cost is the cost that involves the subtraction of depreciation cost from the total cost of the asset.

carrying cost is that value in the balance sheet which is equal to the original price of the assets at the time of purchasing the assets but it goes not varying the time