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huyvu
Sep 14, 2008, 07:17 PM
When bonds are sold at a premium and the effective interest method is used for amortization, at each subsequent interest payment date, the cash paid is

acctgwizard
Jan 28, 2009, 12:26 AM
the carrying value.

Cynthia514
Jan 29, 2009, 12:52 PM
Sorry acctgwizaard, I don't think it's the carrying value. It just a cash payment and we'll pay the same amount every time we have to pay interest. The interest expense will be less than the cash payment (due to the premium). Take the difference of interest expense and cahs payment, subtract it from the bondpayable (the amount remaining from previous period). That's your carrying value for this period after the cash payment has been made.