[Rhunter]

When purchasing a Bond at a Premium (Market Rate lower than Stated Rate), one should debit Investment in HTM Securities for the face value of the Bond, credit cash for the purchase price, and debit Bond Premium as a Plug, correct?

I just worked through a SIM that debited Invenstment in HTM Securities for the full amount of the cash payment, and amortized the Premium directly to the Investment in HTM Securities account.

Which is correct? I can’t find anything other than this problem that doesn’t record a separate line for the Premium. Am I missing something?

Thanks!

[AScott89]

The only thing I can think of is it's being accounted for under the equity method. I could be wrong though.

BEC-65
AUD-72(8 '14); 68(11 '14)
FAR-
REG-

[Author]

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