Wize University Introduction to Financial Accounting Textbook > Long-Term Liabilities
Bond Related Accounts on the Income Statement
Popular Courses
COMM 217
Concordia University
ACCT 2301
The University of Texas at Dallas
Intro to Financial Accounting
General Course
COMM 293
University of British Columbia
Intro to Financial Accounting
University Study Guides
ACCT 1220
University of Guelph
Intro to Financial Accounting
University Study Guides
ACCT 217
University of Calgary
ADMS 2500
York University
COMMERCE 1AA3
McMaster University
COMM 111
Queen's University
BU127
Wilfrid Laurier University
COMM 1101
Dalhousie University
ACCT 2301
Houston
ACCT 2301
Houston
AFM 101
University of Waterloo
BUS 251
Simon Fraser University
AFA 100
Toronto Metropolitan University
BUSINESS 3321K
Western University
ACCT-1510
University of Windsor
0:00 / 0:00
Bonds on the Income Statement
The income statement contains all revenue and expenses related to a bond issuance or bond redemption.
Interest Expense
- Non-operating section of the statement.
- Only interest incurred in the reporting period.
Gain or Loss on Early Redemption
- Non-operating section of the statement.
0:00 / 0:00
Example: Bonds on the Income Statement
ABC Inc. issued a 5-year semi-annual bond with a coupon rate of 10% and a face value of $100,000. The market rate at issuance was 8% and the company's fiscal year ends on December 31.
Show in proper form how the bond related account would appear on the Income Statement for the year ended December 31st, 2020.
Mark Yourself Question
- Grab a piece of paper and try this problem yourself.
- When you're done, check the "I have answered this question" box below.
- View the solution and report whether you got it right or wrong.
Practice: Bonds on the Income Statement
On January 1st, 2020, Wize Corp. issued bonds with a face value of $400,000 and a stated rate of 6%. The coupons are paid semi-annually on January 1st and July 1st and will expire in 10 years. The market rate at the time of issuance was 8% and the bonds were initially sold for $345,643.60.
Show how the bond related account would appear on the Income Statement for the year ended November 30th, 2020.