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In: Accounting

What is the carrying amount of a bond?

 

What is the carrying amount of a bond?

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Expert Solution

 

Step 1: Definition of bond

A bond is a type of long-term liability in which the company issues a bond to fulfill a large number of money needs.

Step 2: Carrying amount of bond

The price at which the bond is purchased is known as the carrying amount of the bond.

For example: If the face value of a bond is $35, but it is purchased at $40, then $40 is known as the carrying amount of the bond.

 

The price at which the bond is issued is known as the face value of the bond.

Sahil Dangi answered 2 years ago
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