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Payment to bondholders in a discount/premium bond

When the bond is issued at premium or at discount, the payments to bondholders are the coupons payments, this coupon payments are the interest expense recorded on the IS or is the YTM at issuance*current book value liability of the bond.

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Interest expense on the income statement is the coupon payment plus amortization of any premium or discount.  The amortization can be done using the effective interest rate method as you described, or (US GAAP) straight-line.

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Thank you S2000. Appreciated

~ The best is yet come ~

My pleasure.

Simplify the complicated side; don't complify the simplicated side.

Financial Exam Help 123: The place to get help for the CFA® exams
http://financialexamhelp123.com/