Asked by Katelyn Chapman on Jul 01, 2024

When a portion of a bond issue is redeemed, a related proportion of the unamortized premium or discount must be written off.

Bond Issue

The process of offering bonds for sale to potential investors, typically to raise capital for a corporation or government.

Redeemed

The act of repaying or buying back something, such as repaying a loan, fulfilling a promise, or converting a financial security.

Unamortized Premium

The portion of the bond premium that has not yet been expensed to interest over the life of the bond.

Comprehend the accounting treatment for the redemption of bonds and the impact of gains and losses on redemption.

Learning Objectives

Comprehend the accounting treatment for the redemption of bonds and the impact of gains and losses on redemption.