Section 2: 30–40%2H
Long-Term Debt (Financial Liabilities)
Bond accounting is a cornerstone of FAR. AICPA tests premium/discount amortization, carrying value calculations, and early extinguishment.
What AICPA Wants You to Know
- 1Calculate the issue price of bonds using present value concepts
- 2Apply the effective interest method to amortize bond premium or discount
- 3Record early retirement of bonds and calculate gain or loss
- 4Distinguish between coupon rate and market (effective) interest rate
- 5Understand the relationship between bond price and interest rates