Sorry, I messed up. Yes, interest expense will be lower for premium bonds (even though BV is higher). > Still works, asset is always cash. Premium increases L while discount decreases. But liability is always at par, so it’s always (say) $100k, so how can B/S balance? That can only happen if we change the sign of the contra accounts…at least that’s the general thinking around here.
Thinking about it from a financial statement perspective it’s always netted in LTD. I would never include bond discount in calculating total assets.
Wow, I can’t believe people just spent friday and saterday talking about accounting for issuing bond discounts/premiums. Even worse is that I kept track of this thread through all that time. Now I really feel like those guys on the CFA postcards.