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RECORDING BOND ISSUES

6 May, 2015 - 17:10

Bonds can be issued at face value, at a discount, or at a premium. When bonds are issued at face value, cash is debited and bonds payable credited. When bonds are issued at a discount, the discount on bonds payable account is debited for the amount of the discount. When bonds are issued at a premium, the premium on bonds payable account is credited for the amount of the premium. The present value of a bond is determined by adding the present value of the face value of the bond and the present value of its interest payments. The present value can be calculated using formulas, present value charts, financial calculators or computer programs.