Tham khảo tài liệu tiếng anh chuyên nghành kết toán kiểm toán - phần 13 , tài chính - ngân hàng, kế toán - kiểm toán phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | The income statement for all of 20X3 would include $6,294 of interest expense ($3,147 X 2). This method of accounting for bonds issued a premium is known as the straight-line amortization method, as interest expense is recognized uniformly over the life of the bond. The technique offers the benefit of simplicity, but it does have one conceptual shortcoming. Notice that interest expense is the same each year, even though the net book value of the bond (bond plus remaining premium) is declining each year due to amortization. As a result, interest expense each year is not exactly equal to the effective rate of interest (6%) that was implicit in the pricing of the bonds. For 20X1, interest expense can be seen to be roughly of the bond liability ($6,294 expense divided by beginning of year liability of $108,530). For 20X4, interest expense is roughly ($6,294 expense divided by beginning of year liability of $103,412). Accountants have devised a more precise approach to account for bond issues called the effective-interest method. Be aware that the more theoretically correct effective interest method is actually the required method, except in those cases where the straight-line results do not differ materially. Effective-interest techniques are introduced in a following section of this chapter.
