Amortizable Bond Discount / Premium

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Amortizable Bond Discount/Premium refers to the process of systematically reducing the bond discount or premium over the life of the bond, aligning the bond’s book value with its face value at maturity. This process, known as bond discount amortization, impacts interest expense and financial statements, ensuring accurate reporting of a bond’s cost. The amortization can be executed using methods like the straight-line or effective interest rate method.

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