accy201 at Ole Miss











Bond Face Value
+ Unamortized Premium
– Unamortized Discount
Bond Carrying Value
Bond Payment Amount = Face Value of the Bond * Annual Coupon Rate / # of Payments Per Year
If a bond pays semi-annually, then there are two payments per year. If it's annual, then it's just 1 payment per year.
Bond Interest Expense = Carrying Value * Market Interest Rate
Bond Face Value * PV$1(i,n)
+ Payment Amount * PVOA(i,n)
Bond Selling Price
When calculating the selling price, be sure to use the Market Rate for i.
Cash Out
– Cash In
Cost of Borrowing (Bonds)
Cash Payments
– Premium
+ Discount
Cost of Borrowing (Bonds)
Bond Carrying Value
– Cash Paid to Retire
Gain / Loss on Retirement of Bond