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Horngren'S Financial And Managerial Accounting
Found in: Page 654

Short Answer

What is the carrying amount of a bond?

Difference between the bond payable and discount amount is the carrying amount of bond.

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Step by Step Solution

Step 1: Definition of bond

A bond is shown as the liabilities in the books of accounts. Bond is the value of loan take by the company by making bond agreement.

Step 2: Carrying amount of bond

The price at which the bond is purchased is known as the carrying amount of the bond. Carrying value is calculated by subtracting unamortised discount and adding unamortised premium in the face value.

For example: If the face value of a bond is $35, but it is purchased at $40, then $40 is known as the carrying amount of the bond.

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