bonds on b/s

CFA Level I
#1

when you have a 1000 par bond issued at a discount, the cff increrases by say 925 and the liability of 925 goes to the b/s. my question is ,does the 75 (amount to be amortized) also go into the b/s?. i guess it should…pls confirm. if no,please explain. thanks

#2

Discount Bond on Issuance Cash DR 925 Bond Discount DR 75 *******Bond Payable CR 1000 Premium Bond on Issuance Cash DR 1100 *******Bond Payable CR 1000 *******Bond Premium CR 100

#3

It is added to the balance sheet over time as the bond approaches maturity.

#4

A discount bond is like not paying off all the interest on your credit card. The amount owed increases every period, as does the interest charge.

#5

Good expression chrismaths. Makes better sense now.