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When you account for bonds payable, you first construct a bond amortization table. If you issue a bond at a premium, the Premium on Bonds Payable account starts out with a balance that reflects the original amount the market paid in excess of the face value of the bond. Over time what happens to the balance in the "premium" account? Assume the effectiveinterest rate method is used, does the premium account change more at the beginning or the end of the time to maturity?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9442509

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