This video explains how to account for bonds issued at a discount using the effective interest rate method for bond discount amortization.

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QUESTION: What happens to the Discount and B/P accounts?

honestly this helped me better than becker. I've always had issues with bonds or any debt instruments

Thanks so much for posting this! I just couldn't grasp this in my online course I've been frustrated for days and this makes sense now. My question is – there is a constant market rate used of 4% in this example to determine the discount amortized, but in reality wouldn't that market rate fluctuate too as time goes on?

i was reading the chapter of bonds the teacher gave us and i have not understood anything.

but when i wachted your video everything is clear now. thank you so much for this lesson.

I disagree with your present value of principal calculation over 8% annual interest. (1+4%) to the power of 6 is not equal to (1+8%) to the power of 3. The market rate is "annual" 8%. So you have to use (1+8%) to the power of 3 in your formula @ 6 minute 40 sec of your video.

why we just increase the interest rate from 6% to 8% and not doing any discount

bond discount amortization make sense after this video, thank you so much!

Thank you sir! MUCH better than reading the textbook

PERFECT, I LIKE YOUR CLASS

thank you sm! you're my accounting god!

im having trouble inputting the present value interest payments into the calculator

thank you so much

Question: from the power point that my teacher is using for class there is another column within the table called Discount Account Balance. I noticed you don't have that in your table, so is it something that should be ignored?

As a student in a Masters of Accounting program, your videos have literally been a lifesaver. I know comments can go unnoticed but your videos are the perfect examples and perfect way of explanation. Thank you for taking time to put these videos out.

You are the best 💛

Love your videos!!!

How the company decides 6% interest for the offering, based on the WACC . ? And why same company has different bond offerings at different rates? With same maturity?

Thank you. Im doing a problem with intercompany bonds (parent-sub) and needed a refresher course on bond discounts. You just saved me lots of time!

Thank you!

This was a great help. Thank you for clear explanation.

Who else is taking financial accounting course??

16:46 best point made!!!!

I Wish my instructor had explained these like you did. First time I have understood what is happening and how to calculate each step. Thanks for a great video.

I did watch your time value of money tutorial but Im curious as to why 1 is always used in the formula

I'm still so so confused

Why do i pay for school when i learn everything here anyways?

thank you! do i need to make any more journal entries after the last interest expense 1/1/20? or is that the last and final one

Can you clarify why you use market rate instead of stated rate? is it because u give a discount so you use market?

So glad he decide to write out how he got the present values!

why do u add discount amortized to the carrying value?

This might be one of your best videos! Thank you!

Thanks so helpful

Thank You very much 😍😍😍