Fin instrument question

This topic has 1 reply, 2 voices, and was last updated 11 years ago by MikeLittle.

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March 25, 2015 at 7:48 pm #238843
Anton
Member
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Hello Mike.

I have one probably very easy question to you. When the entity issues bonds for 1000$ cash but amortized bond value is 900$ where $100 difference goes in SoFP? and how is this difference amortized over the period of bond amortization?
March 25, 2015 at 9:18 pm #238850
MikeLittle
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I don’t think you would receive $1,000 cash!

You would receive $900 and unroll it to arrive at $1,000 by redemption date (Dr finance charges Cr loan with the unrolled finance charge)
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