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Amortization of a Premium Increases Bond Interest Expense, While Amortization

question 88

True/False

Amortization of a premium increases bond interest expense, while amortization of a discount decreases bond interest expense.


Definitions:

GAAP

Generally Accepted Accounting Principles, the standard framework of guidelines for financial accounting used in any given jurisdiction.

Book Values

The value of an asset or liability according to a company's balance sheet, accounting for depreciation or amortization.

Capital Interest

Capital Interest refers to the interest on investment that is considered part of the cost of a fixed asset or is capitalized.

Bonus

A bonus refers to a financial compensation that is above and beyond the normal payment expectations of its recipient.

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