Any accountants in here?

[The Nevermoron]

I'm studying for my next test, and it's all about accounting for bond transactions.
Anyone have a good understanding of this subject?

 

[Tiff]

Hmm, I'm an attorney and was in banking for 10 years before that. Hit me with it. Plus I feel guilty for making fun of your spelling before

 

[The Nevermoron]

That's OK, I had it coming. My fave band.........I should know how to spell the dudes name.
Anyway, here:

When accounting for the issuance of bonds at a premium or discount, why is the interest expense debited?
I've got way more questions, but let's start with that one.

 

[Tiff]

I believe its because when the bond is sold, it is recorded in a bond payable account at face value. Then the cash account is debited for cash received, with the balance being a debit in the discount account or credit in the premium account. These are amortized over the life of the bond and the issuer has to pay interest and recognize a loss or gain for that period.

 

[Will Bozarth]

Bond... James Bond.

 

[WhiteBeastofWotan]

Gold bond. For the n00ts.