For company A, shouldn’t the coupon received be an income?
Company A is receiving the coupon, but it has to be split into the interest component and amortization of premium.
Remmeber for L1 when you did a company issuing a bond above/below par and you had to show the effective interest rate in the income statement but coupn paid in CFO. The difference being the amortisation of the discount/premium.
Thye have to do a similar thing when you purchase bonds and classifiy them at “held to maturity”
Interest income is based on the yield when the bind was bougfht
Balance sheet value represents the PV of payments expect discounted at the yield when purchased.
Coupon will ned up in cash flow (CFO US GAAP, CFO or CFI IFRS)