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Bond Interest with Discount Amortization
Recording periodic interest payment and the amortization of a bond discount using the straight-line method.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Interest Expense | Expense (+) | 5,500.00 | - |
| Discount on Bonds Payable | Contra-Liability (-) | - | 500.00 |
| Cash | Asset (-) | - | 5,000.00 |
💡 Accountant's Note
The interest expense is higher than the cash paid because it includes the 'cost' of the discount spread over the bond's life.
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