Effective Interest Rate Method: Rationale, Advantages, and Bond Amortization Explained Financial Terms Explained
Conversely, for a bond issued at a premium, the carrying amount decreases over time, leading to a lower interest expense in later periods. The difference between coupon/interest paid and discount amortized is an accretion to bond value. At maturity, carrying a value of a bond will reach the par value of the bond and is … Read more