# When the bonds are sold for more than their face value the carrying amount of the bonds is equal to?

## When the bonds are sold for more than their face value the carrying amount of the bonds is equal to?

Question: When bonds are sold for more than face value, the carrying value of the bonds is equal to face value face value plus the unamortized discount face value minus the unamortized premium face value plus the unamortized premium Contribution margin.

## When a bond sells for more than face value it is called a?

If a bond is trading at a premium, this simply means it is selling for more than its face value.

When bonds are sold at their face amount?

When a bond is issued at par value it is sold for the face value amount. This generally means that the bond’s market and contract rates are equal to each other, meaning that there is no bond premium or discount.

When bonds are issued at face amount What happens to the carrying value?

When bonds are issued at face amount, what happens to the carrying value and interest expense over the life of the bonds? Carrying value and interest expense remain unchanged. At face amount. Animal World issues ten-year bonds at their face amount of \$100 million with the option to call the bonds at \$102 million.

### When bonds are sold between interest dates?

When bonds are sold on dates between the interest payment dates, the issuing corporation collects from investors the interest that has accrued since the last interest payment date. When the next interest payment date arrives, the corporation pays the bondholders interest for the entire interest periods.

### When a bond is sold at a premium the carrying value will each period that the premium is amortized?

When a bond is sold at a premium, the carrying value will decrease each period that the premium is amortized. A company issues \$80,000 of 6%, 5-year bonds dated January 1 that pay interest semiannually on June 30 and December 31 each year.

When bonds are sold for less than the face amount?

discount bond
A discount bond is a bond that is issued for less than its par—or face—value. Discount bonds may also be a bond currently trading for less than its face value in the secondary market. A bond is considered a deep-discount bond if it is sold at a significantly lower price than par value, usually at 20% or more.

When a bond is selling for less than its face value it is said to be selling at a quizlet?

Discount – A bond that sells for less than its face value sells at a discount. 3.

#### Are bonds issued at face value?

Bonds are issued at par or face value if the stated interest rate equals the prevailing rate for similar investments at the issue date.

#### What is face value for a bond?

Face value is equal to a bond’s price when it is first issued, but the price changes after that. As the bond’s price fluctuates, the price is described relative to the original par value, or face value; the bond is referred to as trading above par value or below par value.

When bonds are issued at a discount below face amount the carrying value and the corresponding interest expense increases over time?

When bonds are issued at a discount (below face amount), the carrying value and the corresponding interest expense increase over time. Interest expense on bonds payable is calculated as the: Carrying value times the market interest rate. A bond issue with a face amount of \$500,000 bears interest at the rate of 7%.

When bonds are sold between interest dates the purchaser pays the accrued interest to the bond issuer?

When bonds sell between interest payment dates, the purchaser will pay the price of the bonds plus the accrued interest because at the next interest payment date the buyer will receive interest for the entire interest period. You just studied 45 terms!